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Does industry monopolization widen wage residual inequality In China?

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  • Zhu, Chen
  • Wang, Zekai
  • Jiang, Qi
  • Xie, Chang

Abstract

Fair income distribution is crucial for achieving common prosperity. This study used data from the China General Social Survey and Herfindahl–Hirschman index to explore the relation between industry monopoly and wage residual inequality, with a specific focus on the mediating role of informal employment. We found that industry monopoly significantly increased wage residual inequality, indirectly affecting lower-income groups through informal employment and exhibiting an inverted U shape. The DiNardo–Fortin–Lemieux counterfactual decomposition method shows that changes in residual inequality were primarily due to price effects, whereas structural effects were minimal but helped reduce wage residual inequality. This study provides key insights for understanding industry wage gaps and promoting high-quality employment.

Suggested Citation

  • Zhu, Chen & Wang, Zekai & Jiang, Qi & Xie, Chang, 2024. "Does industry monopolization widen wage residual inequality In China?," International Review of Economics & Finance, Elsevier, vol. 96(PA).
    • Handle: RePEc:eee:reveco:v:96:y:2024:i:pa:s1059056024004957
    DOI: 10.1016/j.iref.2024.103503
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    More about this item

    Keywords

    Income distribution; Wage residual inequality; Industry monopoly; Informal employment; Herfindahl–hirschman index;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • 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

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