The effect of the state sector on wage inequality in urban China: 1988–2007

Xia, Qingjie; Song, Lina; Li, Shi; Appleton, Simon

Abstract

This paper examines the effect of the public sector and state-owned enterprises (SOEs) on wage inequality in urban China using China Household Income Project data. It applies quantile regression analysis, the Machado and Mata decomposition to investigate how urban wage inequality was affected by the changes in wage structure and employment shares of the public sector and SOEs. We find that since the radical state sector reforms designed to reduce overstaffing and improve efficiency in the late 1990s, urban wage gaps were narrowed due to the reduction in the employment share of the state sector; the wage premium of the state sector in comparison with the non-state sector increased significantly; and changes in the wage structure of the labour market caused the rise in urban wage inequality.

Citation

Xia, Q., Song, L., Li, S., & Appleton, S. (2014). The effect of the state sector on wage inequality in urban China: 1988–2007. Journal of Chinese Economic and Business Studies, 12(1), https://doi.org/10.1080/14765284.2013.875282

• Journal Article Type: Article
• Acceptance Date: Nov 22, 2013
• Publication Date: Jan 23, 2014
• Deposit Date: Feb 19, 2016
• Publicly Available Date: Feb 19, 2016
• Journal: Journal of Chinese Economic and Business Studies
• Print ISSN: 1476-5284
• Electronic ISSN: 1476-5292
• Publisher: Routledge
• Peer Reviewed: Peer Reviewed
• Volume: 12
• Issue: 1
• DOI: https://doi.org/10.1080/14765284.2013.875282
• Keywords: China, public sector, SOEs, urban wage inequality, wage gaps, quantile regression, counterfactual analysis
• Public URL: https://nottingham-repository.worktribe.com/output/721237
• Publisher URL: http://www.tandfonline.com/doi/abs/10.1080/14765284.2013.875282