Determinants of Wage Arrears and their Implications for the Socioeconomic Wellbeing of China’s Migrant Workers: Evidence from Guangdong Province

This study has three purposes. The first is to examine the determinants of wage arrears among rural-urban migrants in China. The second is to examine the effect of wage arrears on economic wellbeing as proxied by wages. The third is to examine how experiencing wage arrears affects several subjective indicators of wellbeing, such as feelings of belongingness and discrimination in the city. To examine the determinants of wage arrears and its implications for socioeconomic wellbeing, we employ pooled data from a unique representative dataset collected in Guangdong province, one of the major destinations for migrants in China, for the years 2006, 2008 and 2009. We find that in 2006 9 per cent of the sample reported wage arrears and that this figure fell to 6 per cent in 2008 and 7 per cent in 2009. Males were more likely to experience wage arrears as were those working for private firms and micro-entrepreneurs, relative to those working for government agencies. Those with a labour contract, those who were a member of a trade union and those who had a trade union in the workplace were less likely to experience wage arrears. Those experiencing wage arrears received 3.8 per cent lower monthly wages, were 11.4 per cent more likely to perceive that life was difficult in the city, were 6.8 per cent more likely to perceive that their status was lower than others in the city and were 5.6 per cent more likely to believe life would be easier with a non-agricultural household registration.