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Economic Liberalization with Rising Segmentation in China's Urban Labor Market

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  • Sylvie Démurger

    (GATE, Université Lyon 2-CNRS 93, chemin des Mouilles BP 167, F-69131 Ecully Cedex France and HIEBS The University of Hong Kong)

  • Martin Fournier

    (GATE, Université Lyon 2-CNRS 93, chemin des Mouilles BP 167, F-69131 Ecully Cedex France)

  • Li Shi

    (School of Economics and Business, Beijing Normal University 19, Xinjiekouwai Dajie Beijing 100875, China)

  • Wei Zhong

    (Institute of Economics Chinese Academy of Social Sciences 2, Yuetan Beixiaojie, Beijing 100836, China)

Abstract

The massive downsizing of the state-owned sector and the concomitant impressive growth of the private sector at the end of the 1990s have altered the nature of the Chinese labor market. The introduction of market mechanisms has contributed to increasing labor turnover and competitiveness in market wages. Using two urban household surveys for 1995 and 2002, this paper analyzes the evolution of labor market segmentation in urban China by applying an extended version of Oaxaca-Blinder decomposition methods. During the seven-year period, the sharp increase in real earnings for all workers shows substantial differences across ownership, economic sectors, and regions. We find strong evidence of a multitiered labor market along these three major lines and highlight increasing segmentation within each of the three dimensions, with the gap between the privileged segments of the labor market and the most competitive segments widening over time. (c) 2007 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal Asian Economic Papers.

Volume (Year): 5 (2006)
Issue (Month): 3 (June)
Pages: 58-101

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Handle: RePEc:tpr:asiaec:v:5:y:2006:i:3:p:58-101

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