Economic Liberalization with Rising Segmentation on China's Urban Labor Market

59 Pages Posted: 12 Jun 2006

See all articles by Sylvie Démurger

Sylvie Démurger

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Martin Fournier

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Li Shi

Chinese Academy of Social Sciences (CASS) - Institute of Economics; IZA Institute of Labor Economics

Zhong Wei

Chinese Academy of Social Sciences (CASS) - Institute of Economics

Date Written: June 9, 2006

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.

Keywords: labor market, earnings differentials, segmentation, China

JEL Classification: J31, J41, P23, O53

Suggested Citation

Démurger, Sylvie and Fournier, Martin and Shi, Li and Wei, Zhong, Economic Liberalization with Rising Segmentation on China's Urban Labor Market (June 9, 2006). Available at SSRN: https://ssrn.com/abstract=907424 or http://dx.doi.org/10.2139/ssrn.907424

Sylvie Démurger (Contact Author)

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France
(33 4) 72 86 61 05 (Phone)
(33 4) 72 86 60 90 (Fax)

HOME PAGE: http://www.gate.cnrs.fr/spip.php?article22

Martin Fournier

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France

Li Shi

Chinese Academy of Social Sciences (CASS) - Institute of Economics ( email )

2 Yuetan Beixiaojie
Beijing
+86 1 068032473 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Zhong Wei

Chinese Academy of Social Sciences (CASS) - Institute of Economics ( email )

2 Yuetan Beixiaojie
Beijing, Beijing
China

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