IDEAS home Printed from https://ideas.repec.org/p/inq/inqwps/ecineq2006-46.html
   My bibliography  Save this paper

Economic liberalization with rising segmentation on China’s urban labor market

Author

Listed:
  • Sylvie Démurger

    () (HIEBS, The University of Hong Kong and CNRS (France))

  • Martin Fournier

    () (GATE, Université Lyon 2 (France)))

  • Li Shi

    () (School of Economics and Business, Beijing Normal University)

  • Wei Zhong

    () (Institute of Economics, Chinese Academy of Social Sciences (Beijing))

Abstract

The massive downsizing of the state-owned sector and the concomitant impressive growth of the private sector at the end of the 1990s have altered the nature of the Chinese labor market. By bringing in more competition and market mechanisms, they have contributed to increasing labor turnover and competitiveness in market wages. Using two urban household surveys for 1995 and 2002, this paper analyzes the evolution of labor market segmentation in urban China, by applying an extended version of Oaxaca-Blinder decomposition methods. During the 7-year period, the sharp increase in earnings for all workers however shows substantial differences across ownership, economic sectors, and regions. We find strong evidence of a multi-tiered labor market along these three major lines and highlight increasing segmentation within each of the three dimensions, the gap between the privileged segments of the labor market and the most competitive segments widening over time.

Suggested Citation

  • Sylvie Démurger & Martin Fournier & Li Shi & Wei Zhong, 2006. "Economic liberalization with rising segmentation on China’s urban labor market," Working Papers 46, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2006-46
    as

    Download full text from publisher

    File URL: http://www.ecineq.org/milano/WP/ECINEQ2006-46.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    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. 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.
    3. John Knight & Lina Song & Jia Huaibin, 1999. "Chinese rural migrants in urban enterprises: Three perspectives," Journal of Development Studies, Taylor & Francis Journals, vol. 35(3), pages 73-104.
    4. 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.
    5. Meng,Xin, 2009. "Labour Market Reform in China," Cambridge Books, Cambridge University Press, number 9780521121118, May.
    6. Dong, Xiao-yuan & Bowles, Paul, 2002. "Segmentation and discrimination in China's emerging industrial labor market," China Economic Review, Elsevier, vol. 13(2-3), pages 170-196.
    7. 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.
    8. Maurer-Fazio, Margaret & Hughes, James, 2002. "The Effects of Market Liberalization on the Relative Earnings of Chinese Women," Journal of Comparative Economics, Elsevier, vol. 30(4), pages 709-731, December.
    9. 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.
    10. Fleischer, Belton M. & Yang, Dennis T., 2003. "Labor laws and regulations in China," China Economic Review, Elsevier, vol. 14(4), pages 426-433.
    11. Appleton, Simon & Knight, John & Song, Lina & Xia, Qingjie, 2002. "Labor retrenchment in China: Determinants and consequences," China Economic Review, Elsevier, vol. 13(2-3), pages 252-275.
    12. Tito Boeri & Katherine Terrell, 2002. "Institutional Determinants of Labor Reallocation in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 51-76, Winter.
    13. Dong, Xiao-Yuan & MacPhail, Fiona & Bowles, Paul & Ho, Samuel P. S., 2004. "Gender Segmentation at Work in China's Privatized Rural Industry: Some Evidence from Shandong and Jiangsu," World Development, Elsevier, vol. 32(6), pages 979-998, June.
    14. Xin Meng & Junsen Zhang & Pak-Wai Liu, 2000. "Sectoral gender wage differentials and discrimination in the transitional Chinese economy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(2), pages 331-352.
    15. Knight, J. & Shi, L. & Renwei, Z., 1999. "A Spatial Analysis of Wages and Incomes in Urban China: Divergent Means, Convergent Inequality," Economics Series Working Papers 99209, University of Oxford, Department of Economics.
    16. Samuel P.S. Ho & Xiao-Yuan Dong & Paul Bowles & Fiona MacPhail, 2002. "Privatization and enterprise wage structures during transition: Evidence from rural industry in china," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(3), pages 659-688, November.
    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. John Giles & Albert Park & Fang Cai, 2003. "How has Economic Restructuring Affected China???s Urban Workers?," William Davidson Institute Working Papers Series 2003-628, William Davidson Institute at the University of Michigan.
    19. Zhao, Yaohui, 2001. "Foreign direct investment and relative wages: The case of China," China Economic Review, Elsevier, vol. 12(1), pages 40-57.
    20. Björn Gustafsson & Shi Li, 2000. "Economic transformation and the gender earnings gap in urban China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(2), pages 305-329.
    21. Meng, Xin, 1998. "Male-female wage determination and gender wage discrimination in China's rural industrial sector," Labour Economics, Elsevier, vol. 5(1), pages 67-89, March.
    22. 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.
    23. 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.
    24. Adamchik, Vera A. & Bedi, Arjun S., 2000. "Wage differentials between the public and the private sectors: evidence from an economy in transition," Labour Economics, Elsevier, vol. 7(2), pages 203-224, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peiwen Bai & Wenli Cheng, 2014. "Accounting for Labor Misallocation in China with Provincial Data 1980-2010," Monash Economics Working Papers 52-14, Monash University, Department of Economics.
    2. Cai, Lixin & Liu, Amy Y.C., 2015. "Wage determination and distribution in urban China and Vietnam: A comparative analysis," Journal of Comparative Economics, Elsevier, vol. 43(1), pages 186-203.
    3. Kritkorn Nawakitphaitoon & Xuan Chen & Yuhao Ge, 2016. "State and Non-state Earnings Differentials over Time in China’s Urban Labor Market: Evidence from the Urban Household Survey (1994–2007)," Journal of Labor Research, Springer, vol. 37(3), pages 287-316, September.
    4. Chen, Yuanyuan & Feng, Shuaizhang, 2009. "Parental Education and Wages: Evidence from China," IZA Discussion Papers 4218, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    labor market; earnings differentials; segmentation; China.;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inq:inqwps:ecineq2006-46. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maria Ana Lugo). General contact details of provider: http://edirc.repec.org/data/ecineea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.