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What caused the wage convergence between urban natives and migrants in China?

Author

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  • Mengdan Li

    (Faculty of Economics and Business, Hokkaido University)

Abstract

In the Chinese labor market, the wage gap between urban natives and rural-urban migrants has narrowed 17% from 2002 to 2013. This research focuses on wage convergence and seeks to underpin the reasons. I utilize the Chinese Household Income Project (CHIP) survey dataset and employ Juhn, Murphy, and Pierce (1991) decomposition method to undertake the analysis. I find three main factors that caused the closing wage gap: reduced discrimination (74.45%), favorable wage structure (31.24%), and improvement in job characteristics of migrants (24.56%). But the differentials in schooling quality widen the wage gap by 45.00%. This study further explores the wage gap trends in different skill groups and finds that low-skilled migrants benefit more than high-skilled from the labor market.

Suggested Citation

  • Mengdan Li, 2020. "What caused the wage convergence between urban natives and migrants in China?," Economics Bulletin, AccessEcon, vol. 40(3), pages 2275-2288.
    • Handle: RePEc:ebl:ecbull:eb-19-01075
    as

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    References listed on IDEAS

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    2. Ma, Xinxin, 2018. "Labor market segmentation by industry sectors and wage gaps between migrants and local urban residents in urban China," China Economic Review, Elsevier, vol. 47(C), pages 96-115.
    3. Nabanita Datta Gupta & Ronald L. Oaxaca & Nina Smith, 2006. "Swimming Upstream, Floating Downstream: Comparing Women's Relative Wage Progress in the United States and Denmark," ILR Review, Cornell University, ILR School, vol. 59(2), pages 243-266, January.
    4. Myeong‐Su Yun, 2009. "Wage Differentials, Discrimination And Inequality: A Cautionary Note On The Juhn, Murphy And Pierce Decomposition Method," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(1), pages 114-122, February.
    5. Blau, Francine D & Kahn, Lawrence M, 1997. "Swimming Upstream: Trends in the Gender Wage Differential in 1980s," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 1-42, January.
    6. Meng, Xin & Zhang, Junsen, 2001. "The Two-Tier Labor Market in Urban China: Occupational Segregation and Wage Differentials between Urban Residents and Rural Migrants in Shanghai," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 485-504, September.
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    Cited by:

    1. Wang, Haining & Cheng, Zhiming, 2021. "Mama loves you: The gender wage gap and expenditure on children's education in China," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1015-1034.

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    More about this item

    Keywords

    wage convergence; JMP decomposition; rural-urban migrants;
    All these keywords.

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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