Understanding Urban Wage Inequality in China 1988-2008: Evidence from Quantile Analysis

35 Pages Posted: 12 Jan 2013

See all articles by Simon Appleton

Simon Appleton

University of Nottingham - School of Economics

Lina Song

Nottingham University Business School

Qingjie Xia

Peking University

Abstract

This paper examines change in wage gaps in urban China by estimating quantile regressions on CHIPS data. It applies the Machado and Mata (2005) decomposition, finding sharp increases in inequality from 1988 to 1995 and from 2002 to 2008 largely due to changes in the wage structure. The analysis reports how the returns to education and experience vary across wage quantiles, along with wage differentials by sex and party membership. The role of industrial structure, ownership reform and occupational change are also estimated. In the recent period, 2002 to 2008, falls in the returns to education and experience have been equalising. However, changes in every other category of observed wage differential – by sex, occupation, ownership, industrial sector and province – have served to widened inequality. The gender gap continued to rise, as did the gap between white collar and blue collar workers, and between manufacturing and most other industrial sectors.

Keywords: China, labour, wages, quantile regression, inequality

JEL Classification: J31, J42, O15, P23

Suggested Citation

Appleton, Simon and Song, Lina and Xia, Qingjie, Understanding Urban Wage Inequality in China 1988-2008: Evidence from Quantile Analysis. IZA Discussion Paper No. 7101, Available at SSRN: https://ssrn.com/abstract=2199784

Simon Appleton (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham NG7 2RD
United Kingdom

Lina Song

Nottingham University Business School ( email )

Jubilee Campus
Wollaton Road,
Nottingham, NG8 1BB
United Kingdom
0115 8466217 (Phone)

Qingjie Xia

Peking University ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

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