Social Networks and Labor Market Entry Barriers: Understanding Inter-industrial Wage Differentials in Urban China
AbstractAn entry barrier in the labor market can be an important source of wage inequality. This paper finds that social networks, father's education and political status, and urban household registration status (hukou identity), as well as their own education, experience, age, and gender, help people enter high-wage industries. When contrasting coastal and inland samples, after instrumenting social networks by household political identity (based on classifications during the land reform in the 1950s), we find that social networks are more helpful for entering high-wage industries. The implication of this paper is: breaking industrial entry barriers in the urban labor market is an essential policy in order to control inter-industrial wage inequality in urban China.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd09-084.
Date of creation: Sep 2009
Date of revision:
inter-industrial wage differentials; industry monopoly; entry barrier; labor market; social networks; CHIPS data;
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
- Z1 - Other Special Topics - - Cultural Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-10-10 (All new papers)
- NEP-DEV-2009-10-10 (Development)
- NEP-LAB-2009-10-10 (Labour Economics)
- NEP-SOC-2009-10-10 (Social Norms & Social Capital)
- NEP-TRA-2009-10-10 (Transition Economics)
- NEP-URE-2009-10-10 (Urban & Real Estate Economics)
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