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Earnings differentials between the public and private sectors in China: Exploring changes for urban local residents in the 2000s

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  • Démurger, Sylvie
  • Li, Shi
  • Yang, Juan

Abstract

This paper analyzes the changes in public–private sector earnings differentials for local residents in urban China between 2002 and 2007. We find that earnings gaps across ownership sectors decreased during this period and that the convergence trend has been in favor of the private and semi-public sectors as opposed to the public sector. This trend is in sharp contrast to what occurred at the turn of the 21st century when employees in the government and state-owned enterprises were found to enjoy a privileged situation. Differences in endowments are found to play a growing role in explaining earnings differentials. However, although it is becoming less of an issue, segmentation across ownership remains important, especially for high-wage earners.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:chieco:v:23:y:2012:i:1:p:138-153
    DOI: 10.1016/j.chieco.2011.08.007
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    More about this item

    Keywords

    Labor market; Earnings differentials; Segmentation; Enterprise ownership; China;
    All these keywords.

    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
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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