International Journal of Economics, Finance and Management Sciences

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Research on the Wage Gap Between Urban and Rural Labor: Based on CHNS Micro Survey Data

Received: 14 October 2019    Accepted:     Published: 18 November 2019
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Abstract

In recent years, there is a substantial debate on the wage differences in China. Yet most empirical studies of wage gap concentrate only on short-run changes due to the lack of high-quality data. In this paper, we study the wage gap between urban and rural labor in China using the Chinese Health and Nutrition Survey (CHNS) data spanning several years. By the methods of OLS regression and Oaxaca decomposition we have two main findings: first, the wage gap resulting from household register discrimination have been gradually decreasing since the Lewis transition, and the growth rate of migrant workers' wages obviously exceeded the accumulation rate of their human capital in 2011; second, the wage disadvantage of the rural labor mainly comes from the weakness of its human capital, compared with that of the urban labor. These findings would remind us of the rising welfare inequality problem in China against the background that the accumulation of human capital on rural labor have slowed down after the Lewis transition. In the end, we come up with several suggestions for policy reform. First of all, the central government should distribute more educational resources into rural areas specifically. In addition, the local government and enterprises should increase specific investment in skills training for migrant workers. Last but not least, the governments ought to gradually abolish the related rules that restrain migrant workers from obtaining urban public services, which will help to equalize the social welfare in China eventually.

DOI 10.11648/j.ijefm.20190706.13
Published in International Journal of Economics, Finance and Management Sciences (Volume 7, Issue 6, December 2019)
Page(s) 197-202
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Urban-rural Wage Gap, Lewis Transition, Household Register Discrimination

References
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[2] Jiangli Zhu, Zilian Li. Hukou System Reform, Individuals Flows and Regional Disparities: Based on the Intertemporal Model of Heterogeneous Individuals Flows. China Economic Quarterly, 2016, 15 (02): 797-816.
[3] John Knight, Quheng Deng and Shi Li. The Shortage of China’s Peasant-workers, and the Surplus of the Rural Labor Force in China. Management World, 2011 (11): 12-27+187.
[4] Fang Cai. Demographic Transition, Demographic Dividend, and Lewis Turning Point in China. Economic Research Journal, 2010.
[5] Fang Cai. Understanding the Past, Present, and Future of China's Economic Development: Based on A Unified Framework of Growth Theories. Economic Research Journal, 2013, 48 (11): 4-16+55.
[6] Xin Meng, Junsen Zhang. 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, 2001, 29 (3): 0-504.
[7] Jingfang Sun. Changes to Hukou Discrimination in China’s Labor Market: Employment and Wages of Rural Migrant Workers. Economic Research Journal, 2017, 52 (08): 171-186.
[8] Randall S. Brown, Marilyn Moon, and Barbara S. Zoloth. Incorporating Occupational Attainment in Studies of Male-Female Earnings Differentials. Journal of Human Resources, 1980, 15 (1): 3-28.
[9] Pak-Wai Liu, Xin Meng, and Junsen Zhang. Sectoral Gender Wage Differentials and Discrimination in the Transitional Chinese Economy. Journal of Population Economics, 2000, 13 (2): 331-352.
[10] Xin Meng. Male–female Wage Determination and Gender Wage Discrimination in China's Rural Industrial Sector. Labour Economics, 1998, 5 (1): 67-89.
[11] Doris Weichselbaumer, Rudolf Winter‐Ebmer. A Meta-Analysis of the International Gender Wage Gap. Journal of Economic Surveys, 2005, 19 (3): 479-511.
[12] Li Zhang and Binbin Wu. Hukou-based Employment Discrimination and Its Effect on Earnings Differentials: 2002 --2013. Studies in Labor Economics, 2019, 7 (03): 84-99.
[13] Jacob Mincer. The Distribution of Labor Incomes: A Survey with Special Reference to the Human Capital Approach. Journal of Economic Literature, 1970, 8 (1): 1-26.
[14] Jacob Mincer. Schooling, Experience, and Earnings. Human Behavior & Social Institutions No. 2. 1974.
[15] Alan S. Blinder. Wage Discrimination: Reduced Form and Structural Estimates. The Journal of Human Resources, 1973, 8 (4): 436-455
[16] Ronald Oaxaca. Male-Female Wage Differentials in Urban Labor Markets. International Economic Review, 1973, 14 (3): 693.
[17] Ming Lu. Great State Needs Bigger City: The Unity, Development and Balance of Contemporary China, Shanghai: Shanghai people's Publishing House, 2016.
Author Information
  • PBC School of Finance, Tsinghua University, Beijing, P. R. China

  • School of Economics, Shandong University, Jinan, P. R. China

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    Guangtao Xia, Xinzhen Xu. (2019). Research on the Wage Gap Between Urban and Rural Labor: Based on CHNS Micro Survey Data. International Journal of Economics, Finance and Management Sciences, 7(6), 197-202. https://doi.org/10.11648/j.ijefm.20190706.13

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    Guangtao Xia; Xinzhen Xu. Research on the Wage Gap Between Urban and Rural Labor: Based on CHNS Micro Survey Data. Int. J. Econ. Finance Manag. Sci. 2019, 7(6), 197-202. doi: 10.11648/j.ijefm.20190706.13

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    AMA Style

    Guangtao Xia, Xinzhen Xu. Research on the Wage Gap Between Urban and Rural Labor: Based on CHNS Micro Survey Data. Int J Econ Finance Manag Sci. 2019;7(6):197-202. doi: 10.11648/j.ijefm.20190706.13

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  • @article{10.11648/j.ijefm.20190706.13,
      author = {Guangtao Xia and Xinzhen Xu},
      title = {Research on the Wage Gap Between Urban and Rural Labor: Based on CHNS Micro Survey Data},
      journal = {International Journal of Economics, Finance and Management Sciences},
      volume = {7},
      number = {6},
      pages = {197-202},
      doi = {10.11648/j.ijefm.20190706.13},
      url = {https://doi.org/10.11648/j.ijefm.20190706.13},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.ijefm.20190706.13},
      abstract = {In recent years, there is a substantial debate on the wage differences in China. Yet most empirical studies of wage gap concentrate only on short-run changes due to the lack of high-quality data. In this paper, we study the wage gap between urban and rural labor in China using the Chinese Health and Nutrition Survey (CHNS) data spanning several years. By the methods of OLS regression and Oaxaca decomposition we have two main findings: first, the wage gap resulting from household register discrimination have been gradually decreasing since the Lewis transition, and the growth rate of migrant workers' wages obviously exceeded the accumulation rate of their human capital in 2011; second, the wage disadvantage of the rural labor mainly comes from the weakness of its human capital, compared with that of the urban labor. These findings would remind us of the rising welfare inequality problem in China against the background that the accumulation of human capital on rural labor have slowed down after the Lewis transition. In the end, we come up with several suggestions for policy reform. First of all, the central government should distribute more educational resources into rural areas specifically. In addition, the local government and enterprises should increase specific investment in skills training for migrant workers. Last but not least, the governments ought to gradually abolish the related rules that restrain migrant workers from obtaining urban public services, which will help to equalize the social welfare in China eventually.},
     year = {2019}
    }
    

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    AB  - In recent years, there is a substantial debate on the wage differences in China. Yet most empirical studies of wage gap concentrate only on short-run changes due to the lack of high-quality data. In this paper, we study the wage gap between urban and rural labor in China using the Chinese Health and Nutrition Survey (CHNS) data spanning several years. By the methods of OLS regression and Oaxaca decomposition we have two main findings: first, the wage gap resulting from household register discrimination have been gradually decreasing since the Lewis transition, and the growth rate of migrant workers' wages obviously exceeded the accumulation rate of their human capital in 2011; second, the wage disadvantage of the rural labor mainly comes from the weakness of its human capital, compared with that of the urban labor. These findings would remind us of the rising welfare inequality problem in China against the background that the accumulation of human capital on rural labor have slowed down after the Lewis transition. In the end, we come up with several suggestions for policy reform. First of all, the central government should distribute more educational resources into rural areas specifically. In addition, the local government and enterprises should increase specific investment in skills training for migrant workers. Last but not least, the governments ought to gradually abolish the related rules that restrain migrant workers from obtaining urban public services, which will help to equalize the social welfare in China eventually.
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