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Residual wage inequality in urban China, 1995–2007

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  • Xing, Chunbing
  • Li, Shi

Abstract

We use three waves of urban household survey from 1995 to 2007 to investigate the trends of residual inequality and its determinants. First, we find that the enlargement in both the overall and residual inequality was larger at the upper half of the wage distributions between 2002 and 2007. Between 1995 and 2002, however, it is the lower half that experienced larger increase in inequality. Second, by using two complementary semi-parametric methods, we find that composition effect is negligible. Instead, the change in skill prices plays a dominant role in the rise of residual inequality. Finally, by constructing a panel data at the city level, we find that ownership restructuring is an important factor that has caused the skill price to rise, especially in the earlier period. Another finding is that China's export share of GDP has a positive effect on the enlargement of residual wage inequality, especially in the period from 2002 to 2007.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 23 (2012)
Issue (Month): 2 ()
Pages: 205-222

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Handle: RePEc:eee:chieco:v:23:y:2012:i:2:p:205-222

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Web page: http://www.elsevier.com/locate/chieco

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Keywords: Wage inequality; Residual; China;

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Citations

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Cited by:
  1. Felbermayr, Gabriel & Impullitti, Giammario & Prat, Julien, 2014. "Firm Dynamics and Residual Inequality in Open Economies," IZA Discussion Papers 7960, Institute for the Study of Labor (IZA).
  2. Cui, Yuling & Nahm, Daehoon & Tani, Massimiliano, 2013. "Earnings Differentials and Returns to Education in China, 1995-2008," IZA Discussion Papers 7349, Institute for the Study of Labor (IZA).
  3. Zhong Zhao & Zhaopeng Qu, 2013. "Wage Inequality of Chinese Rural-Urban Migrants Between 2002 and 2007," Working Papers PMMA 2013-04, PEP-PMMA.
  4. Démurger, Sylvie & Li, Shi & Yang, Juan, 2012. "Earnings differentials between the public and private sectors in China: Exploring changes for urban local residents in the 2000s," China Economic Review, Elsevier, vol. 23(1), pages 138-153.
  5. Xing, Chunbing, 2011. "Changes in Job Structure and Rising Wage Inequality in Urban China, 1995-2007," IZA Discussion Papers 6184, Institute for the Study of Labor (IZA).

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