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Formal Employment, Informal Employment and Income Differentials in Urban China

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  • Guifu, Chen
  • Shigeyuki, Hamori

Abstract

Oaxaca’s study (1973), along with the China Health and Nutrition Survey (CHNS) questionnaire (2004 and 2006 pooling data), is used as the basis for this study in estimating the formal-informal employment hourly income differential, as well as the formal and informal male-female employment hourly income differential in urban China. The results indicate that differences in the characteristics between formal and informal employment account for a much higher percentage of the hourly income differential than do discrimination. In addition, ignoring the sample selection bias, one finds the formal male-female, the informal male-female hourly income differential and the degree of discrimination against informal women’s employment will be overestimated; conversely, the degree of discrimination against formal women’s employment will be underestimated.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17585.

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Date of creation: Sep 2009
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Handle: RePEc:pra:mprapa:17585

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Keywords: formal employment; informal employment; income differentials; Chinese labor market;

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  1. Sangeeta Pratap & Erwan Quintin, 2001. "Are labor markets segmented in Argentina? a semiparametric approach," Center for Latin America Working Papers, Federal Reserve Bank of Dallas 0701, Federal Reserve Bank of Dallas.
  2. Marcouiller, Douglas & Ruiz de Castilla, Veronica & Woodruff, Christopher, 1997. "Formal Measures of the Informal-Sector Wage Gap in Mexico, El Salvador, and Peru," Economic Development and Cultural Change, University of Chicago Press, University of Chicago Press, vol. 45(2), pages 367-92, January.
  3. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  4. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-79, November.
  5. Galli, Rossana & Kucera, David, 2004. "Labor Standards and Informal Employment in Latin America," World Development, Elsevier, Elsevier, vol. 32(5), pages 809-828, May.
  6. Gong, Xiaodong & van Soest, Arthur, 2002. "Wage differentials and mobility in the urban labour market: a panel data analysis for Mexico," Labour Economics, Elsevier, Elsevier, vol. 9(4), pages 513-529, September.
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