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Ownership and Earnings Inequality in Urban China

Author

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  • Jin Song

    (School of Economics and Business Administration, Beijing Normal University, Beijing100875, China)

  • Shi Li

    (School of Economics and Business Administration, Beijing Normal University, Beijing 100875, China)

Abstract

Along with advances in urban state-owned enterprise reform, fast growth of private sector and changes in the wage structure, earnings inequality in urban China has been increasing. Using data from the 1988 and 2007 waves of the urban household survey conducted by China Household Income Project, this paper attempts to examine the impact of the change in ownership structure on earnings distribution in urban China. We find that developing non-state-owned enterprises (nonSOEs) or privatization of state-owned enterprises (SOEs) enlarge earnings inequality, but the difference in earnings level between the two sectors is small. Although workers in SOEs receive higher income than in nonSOEs, the difference is more caused by endowment difference rather than coefficient differences. Introducing market power to wage determination system is more influential to the rising earnings inequality which leads more rewards on working experience and educational attainment.

Suggested Citation

  • Jin Song & Shi Li, 2010. "Ownership and Earnings Inequality in Urban China," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 5(4), pages 582-603, December.
    • Handle: RePEc:fec:journl:v:5:y:2010:i:4:p:582-603
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    File URL: http://journal.hep.com.cn/fec/EN/10.1007/s11459-010-0114-0
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    References listed on IDEAS

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    1. Chen, Yi & Demurger, Sylvie & Fournier, Martin, 2005. "Earnings Differentials and Ownership Structure in Chinese Enterprises," Economic Development and Cultural Change, University of Chicago Press, vol. 53(4), pages 933-958, July.
    2. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January.
    3. Brandt, Loren & Holz, Carsten A, 2006. "Spatial Price Differences in China: Estimates and Implications," Economic Development and Cultural Change, University of Chicago Press, vol. 55(1), pages 43-86, October.
    4. Gustafsson, Bjorn & Shi, Li, 2001. "The Anatomy of Rising Earnings Inequality in Urban China," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 118-135, March.
    5. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    6. 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.
    7. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
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    Cited by:

    1. Fields, Gary & Song, Yang, 2020. "Modeling migration barriers in a two-sector framework: A welfare analysis of the hukou reform in China," Economic Modelling, Elsevier, vol. 84(C), pages 293-301.
    2. David Pejčoch, 2014. "CADAQUES: The Methodology for Complex Data and Information Management [CADAQUES: Metodika pro komplexní řízení kvality dat a informací]," Acta Informatica Pragensia, Prague University of Economics and Business, vol. 2014(1), pages 44-56.
    3. Fields, Gary S. & Song, Yang, 2013. "A Theoretical Model of the Chinese Labor Market," IZA Discussion Papers 7278, Institute of Labor Economics (IZA).
    4. Yang Song, 2016. "Hukou-based labour market discrimination and ownership structure in urban China," Urban Studies, Urban Studies Journal Limited, vol. 53(8), pages 1657-1673, June.

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    More about this item

    Keywords

    ownership; earnings; inequality; urban China;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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