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

GATE Working Paper No. 1032

35 Pages Posted: 27 Dec 2010

See all articles by Juan Yang

Juan Yang

affiliation not provided to SSRN

Sylvie Démurger

Groupe d'Analyse et de Théorie Economique (GATE), CNRS, University of Lyon

Shi Li

Beijing Normal University (BNU) - School of Economics and Business Administration

Date Written: 2010

Abstract

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.

Keywords: labor market, earnings differentials, segmentation, enterprise ownership, China

JEL Classification: J31, J42, P23, O53

Suggested Citation

Yang, Juan and Démurger, Sylvie and Li, Shi, Earnings Differentials between the Public and the Private Sectors in China: Explaining Changing Trends for Urban Locals in the 2000s (2010). GATE Working Paper No. 1032, Available at SSRN: https://ssrn.com/abstract=1731548 or http://dx.doi.org/10.2139/ssrn.1731548

Juan Yang (Contact Author)

affiliation not provided to SSRN

Sylvie Démurger

Groupe d'Analyse et de Théorie Economique (GATE), CNRS, University of Lyon ( email )

93 Chemin des Mouilles
Ecully, 69130
France

Shi Li

Beijing Normal University (BNU) - School of Economics and Business Administration ( email )

No.19 Xinwai Str
Haidian District
Beijing, 100875
China

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