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Earnings Differentials between the Public and the Private Sectors in China: Explaining Changing Trends for Urban Locals in the 2000s


  • Juan Yang

    (School of Economics and Business - Beijing Normal University)

  • Sylvie Démurger

    () (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

  • Shi Li

    (School of Economics and Business - Beijing Normal University)


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 have been reducing 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 is in sharp contrast to what occurred at the turn of the century, when employees of public administration and enterprises were found to enjoy a very much privileged situation. On the one hand, differences in endowments are found to play a growing role in explaining earnings differentials. On the other hand, although starting to become less an issue, segmentation across ownership remains important, especially for high-wage earners.

Suggested Citation

  • Juan Yang & Sylvie Démurger & Shi Li, 2010. "Earnings Differentials between the Public and the Private Sectors in China: Explaining Changing Trends for Urban Locals in the 2000s," Post-Print halshs-00550348, HAL.
  • Handle: RePEc:hal:journl:halshs-00550348
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    References listed on IDEAS

    1. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
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    Cited by:

    1. Anthony Rush, 2011. "China's Labour Market," RBA Bulletin, Reserve Bank of Australia, pages 29-38, September.
    2. Kwon, Ohyun & Fleisher, Belton M. & Deng, Quheng, 2011. "Evolution of the Industrial Wage Structure in China Since 1980," IZA Discussion Papers 5880, Institute for the Study of Labor (IZA).

    More about this item


    labor market; earnings differentials; segmentation; enterprise ownership; China;

    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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