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Migrants as second-class workers in urban China? A decomposition analysis

  • 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 Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS)

  • Marc Gurgand

    (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, PSE - Paris-Jourdan Sciences Economiques - CNRS - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC))

  • Li Shi

    (School of Economics and Business - Beijing Normal University)

  • Yue Ximing

    (School of Finance - Renmin University of China)

In urban China, urban resident annual earnings are 1.3 times larger than long term rural migrant earnings as observed in a nationally representative sample in 2002. Using microsimulation, we decompose this difference into four sources, with particular attention to path dependence and statistical distribution of the estimated effects: (1) different allocation to sectors that pay different wages (sectoral effect); (2) hourly wage disparities across the two populations within sectors (wage effect); (3) different working times within sectors (hours effect); (4) different population structures (population effect). Although sector allocation is extremely contrasted, with very few migrants in the public sector and very few urban residents working as self-employed, this has no clear impact on differential earnings. Indeed, the sectoral effect is not robust to the path followed for the decomposition. We show that the migrant population has a comparative advantage in the private sector: increasing its participation into the public sector would not necessarily improve its average earnings. The second main finding is that the population effect is robust and significantly more important than wage or hours effects. This implies that the main source of disparity between the two populations is pre-market (education opportunities) rather than on-market.

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Date of creation: Mar 2008
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Handle: RePEc:hal:psewpa:halshs-00586783
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  1. John Knight & Linda Yueh & Linda Y. Yueh, 2003. "Job Mobility of Residents and Migrants in Urban China," Economics Series Working Papers 163, University of Oxford, Department of Economics.
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  16. David Neumark, 1987. "Employers' discriminatory behavior and the estimation of wage discrimination," Special Studies Papers 227, Board of Governors of the Federal Reserve System (U.S.).
  17. de Mel, Suresh & McKenzie, David J. & Woodruff, Christopher, 2009. "Measuring microenterprise profits: Must we ask how the sausage is made?," Journal of Development Economics, Elsevier, vol. 88(1), pages 19-31, January.
  18. 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.
  19. Liu, Pak-Wai & Zhang, Junsen & Chong, Shu-Chuen, 2004. "Occupational segregation and wage differentials between natives and immigrants: evidence from Hong Kong," Journal of Development Economics, Elsevier, vol. 73(1), pages 395-413, February.
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