What caused the wage convergence between urban natives and migrants in China?

Mengdan Li ()
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Mengdan Li: Faculty of Economics and Business, Hokkaido University

Economics Bulletin, 2020, vol. 40, issue 3, 2275-2288

Abstract: In the Chinese labor market, the wage gap between urban natives and rural-urban migrants has narrowed 17% from 2002 to 2013. This research focuses on wage convergence and seeks to underpin the reasons. I utilize the Chinese Household Income Project (CHIP) survey dataset and employ Juhn, Murphy, and Pierce (1991) decomposition method to undertake the analysis. I find three main factors that caused the closing wage gap: reduced discrimination (74.45%), favorable wage structure (31.24%), and improvement in job characteristics of migrants (24.56%). But the differentials in schooling quality widen the wage gap by 45.00%. This study further explores the wage gap trends in different skill groups and finds that low-skilled migrants benefit more than high-skilled from the labor market.

Keywords: wage convergence; JMP decomposition; rural-urban migrants (search for similar items in EconPapers)
JEL-codes: J3 J7 (search for similar items in EconPapers)
Date: 2020-08-19
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Citations: View citations in EconPapers (1)

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