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Are All Migrants Really Worse Off in Urban Labour Markets? New Empirical Evidence from China


  • Jason Gagnon
  • Theodora Xenogiani
  • Chunbing Xing


The rapid and massive increase of rural-to-urban migration in China has drawn attention to the welfare of migrant workers, particularly to their working conditions and pay. This paper uses data from a random draw of the 2005 Chinese national census survey to investigate discrimination in urban labour markets against rural migrants, by comparing their earnings and the sector (formal vs. informal) they work in with those of urban residents and urban migrants. Exploiting differences in their status in the Chinese residential registration system (hukou) we find no earnings discrimination against rural migrants compared with urban residents, contrary to popular belief. In contrast, it is found that urban migrants in fact gain a large wage premium by migrating. However, both rural and urban migrants are found to be discriminated out of the formal sector, working in informal jobs and lacking adequate social protection. [IZA Discussion Paper No. 6268]. URL:[]

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  • Jason Gagnon & Theodora Xenogiani & Chunbing Xing, 2012. "Are All Migrants Really Worse Off in Urban Labour Markets? New Empirical Evidence from China," Working Papers id:4698, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:4698
    Note: Institutional Papers

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    References listed on IDEAS

    1. Zheren WU, 2008. "Self-selection and Earnings of Migrants: Evidence from Rural China," Discussion Papers in Economics and Business 08-25, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    2. Lin, Justin Y & Wang, Gewei & Zhao, Yaohui, 2004. "Regional Inequality and Labor Transfers in China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 587-603, April.
    3. John Whalley & Shunming Zhang, 2004. "Inequality Change in China and (Hukou) Labour Mobility Restrictions," NBER Working Papers 10683, National Bureau of Economic Research, Inc.
    4. Knight, John & Yueh, Linda, 2004. "Job mobility of residents and migrants in urban China," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 637-660, December.
    5. Démurger, Sylvie & Gurgand, Marc & Li, Shi & Yue, Ximing, 2009. "Migrants as second-class workers in urban China? A decomposition analysis," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 610-628, December.
    6. Zhang, Kevin Honglin & Song, Shunfeng, 2003. "Rural-urban migration and urbanization in China: Evidence from time-series and cross-section analyses," China Economic Review, Elsevier, vol. 14(4), pages 386-400.
    7. John Knight & Linda Yueh, 2009. "Segmentation or competition in China's urban labour market?," Cambridge Journal of Economics, Oxford University Press, vol. 33(1), pages 79-94, January.
    8. Margaret Maurer-Fazio & Ngan Dinh, 2004. "Differential rewards to, and contributions of, education in urban China's segmented labor markets," Pacific Economic Review, Wiley Blackwell, vol. 9(3), pages 173-189, October.
    9. 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.
    10. Gagnon, Jason & Xenogiani, Theodora & Xing, Chunbing, 2009. "Are all migrants really worse off in urban labour markets: new empirical evidence from China," MPRA Paper 16109, University Library of Munich, Germany.
    11. Meng, Xin & Zhang, Junsen, 2001. "The Two-Tier Labor Market in Urban China: Occupational Segregation and Wage Differentials between Urban Residents and Rural Migrants in Shanghai," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 485-504, September.
    12. E. Paul Durrenberger, 2005. "Labour," Chapters,in: A Handbook of Economic Anthropology, chapter 8 Edward Elgar Publishing.
    13. 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.
    14. repec:pse:psecon:2008-20 is not listed on IDEAS
    15. WANG Tianhong & Atsushi MARUYAMA & Masao KIKUCHI, 2000. "Rural-Urban Migration And Labor Markets In China: A Case Study In A Northeastern Province," The Developing Economies, Institute of Developing Economies, vol. 38(1), pages 80-104, March.
    16. John Knight & Linda Yueh, 2004. "Urban Insiders versus Rural Outsiders: Complementarity or Competition in China`s Urban Labour Market?," Economics Series Working Papers 217, University of Oxford, Department of Economics.
    17. Meng, Xin & Miller, Paul, 1995. "Occupational Segregation and Its Impact on Gender Wage Discrimination in China's Rural Industrial Sector," Oxford Economic Papers, Oxford University Press, vol. 47(1), pages 136-155, January.
    18. Zhong Zhao, 2005. "Migration, Labor Market Flexibility, and Wage Determination in China: A Review," Labor and Demography 0507009, EconWPA.
    19. Knight, John & Li, Shi, 2005. "Wages, firm profitability and labor market segmentation in urban China," China Economic Review, Elsevier, vol. 16(3), pages 205-228.
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    Cited by:

    1. Corrado Giulietti & Guangjie Ning & Klaus F. Zimmermann, 2012. "Self-employment of rural-to-urban migrants in China," International Journal of Manpower, Emerald Group Publishing, vol. 33(1), pages 96-117, March.
    2. Danzer, Alexander M. & Dietz, Barbara & Gatskova, Ksenia & Schmillen, Achim, 2014. "Showing off to the new neighbors? Income, socioeconomic status and consumption patterns of internal migrants," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 230-245.
    3. Song, Yang, 2014. "What should economists know about the current Chinese hukou system?," China Economic Review, Elsevier, vol. 29(C), pages 200-212.
    4. Jason Gagnon & Theodora Xenogiani & Chunbing Xing, 2009. "Are all Migrants Really Worse off in Urban Labour Markets?: New empirical evidence from China," OECD Development Centre Working Papers 278, OECD Publishing.
    5. Cui, Yuling & Nahm, Daehoon & Tani, Massimiliano, 2012. "The Determinants of Rural Migrants' Employment Choice in China: Results from a Joint Estimation," IZA Discussion Papers 6968, Institute for the Study of Labor (IZA).
    6. Cui, Yuling & Nahm, Daehoon & Tani, Massimiliano, 2013. "Self-Employment in China: Are Rural Migrant Workers and Urban Residents Alike?," IZA Discussion Papers 7191, Institute for the Study of Labor (IZA).
    7. Fields, Gary S. & Song, Yang, 2013. "A Theoretical Model of the Chinese Labor Market," IZA Discussion Papers 7278, Institute for the Study of Labor (IZA).
    8. Ariga, Kenn & Ohtake, Fumio & Sasaki, Masaru & Wu, Zheren, 2012. "Wage Growth through Job Hopping in China," IZA Discussion Papers 7104, Institute for the Study of Labor (IZA).
    9. repec:bla:revinw:v:63:y:2017:i:4:p:821-840 is not listed on IDEAS
    10. Wenshu Gao & Russell Smyth, 2012. "Returns to Schooling in Urban China, 2001-2010: Evidence from Three Waves of the China Urban Labor Survey," Monash Economics Working Papers 50-12, Monash University, Department of Economics.
    11. Vahan Sargsyan, 2015. "Differential Treatment in the Chinese Labor Market. Is Hukou Type the Only Problem?," CERGE-EI Working Papers wp548, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

    More about this item


    Migrants; Urban Labour Markets; China; migration; discrimination; informal employment; Chinese residential registration system; hukou; social protection;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing


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