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Wage Inequality of Chinese Rural-Urban Migrants Between 2002 and 2007

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  • Zhong Zhao
  • Zhaopeng Qu

Abstract

The paper studies the levels and changes in wage inequality among Chinese rural-urban migrants from 2002 to 2007. We use the Chinese Household Income Project dataset and the Rural to Urban Migration in China dataset to construct a unique dataset that allows us to document changing wage inequality among migrants and among urban natives between 2002 and 2007. We find that wage inequality among migrants decreased significantly between 2002 and 2007, whereas it increased among urban natives during the same period. Our results show that the high-wage migrants experienced slower wage growth than middle- and low-wage migrants, a primary cause of declining inequality among migrants. We used distributional decomposition methods, and find that the overall between-group effect (coefficient effect) dominates in the whole wage distribution of the migrants, which means that the change in returns to the characteristics (education and experience) play a key role, but on the upper tails of the wage distribution, the within group effect (residual price effect) dominates which implies that the unobservable factors or institutional barriers do not favor the migrants at the top tail of the wage distribution.

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Bibliographic Info

Paper provided by PEP-PMMA in its series Working Papers PMMA with number 2013-04.

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Date of creation: 2013
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Handle: RePEc:lvl:pmmacr:2013-04

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Keywords: rural to urban migrants; wage inequality; quantity decomposition; China;

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  1. Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June.
  2. Meng, Xin & Shen, Kailing & Xue, Sen, 2013. "Economic reform, education expansion, and earnings inequality for urban males in China, 1988–2009," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 227-244.
  3. Dandan Zhang & Xin Meng & Dewen Wang, 2010. "The Dynamic Change in Wage Gap between Urban Residents and Rural Migrants in Chinese Cities," Working Papers PMMA 2010-03, PEP-PMMA.
  4. Xing, Chunbing & Li, Shi, 2012. "Residual wage inequality in urban China, 1995–2007," China Economic Review, Elsevier, vol. 23(2), pages 205-222.
  5. Knight, John & Song, Lina, 1999. "The Rural-Urban Divide: Economic Disparities and Interactions in China," OUP Catalogue, Oxford University Press, number 9780198293309, September.
  6. Denise Hare, 1999. "'Push' versus 'pull' factors in migration outflows and returns: Determinants of migration status and spell duration among China's rural population," Journal of Development Studies, Taylor & Francis Journals, vol. 35(3), pages 45-72.
  7. Qu, Zhaopeng (Frank) & Zhao, Zhong, 2011. "Evolution of the Chinese Rural-Urban Migrant Labor Market from 2002 to 2007," IZA Discussion Papers 5421, Institute for the Study of Labor (IZA).
  8. John Knight & Lina Song, 2003. "Increasing urban wage inequality in China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(4), pages 597-619, December.
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