Marginal effects of public employment on unconditional distribution of wage income in China

Zhi-fang Su, Xiao-xiang Ma, Wei Xiao and Mei-Yuan Chen

The North American Journal of Economics and Finance, 2020, vol. 54, issue C

Abstract: This paper examines the marginal effects of an employment expansion in China’s public sector on the unconditional distribution of “wage income” using the unconditional quantile estimation suggested by Firpo et al. (2009). Empirical data from the China Health and Nutrition Survey is split into three sub-samples to eliminate the effects of the Asian financial crisis in 1997 and the subprime financial crisis in 2008 on our empirical results. To explore the marginal effects, the empirical unconditional distributions of wage income “before” and “after” an expansion of the public employment have been graphed and compared. It has been found that an expansion of China’s public employment reduces the dispersion of wage income and hence alleviates income inequality in China. Besides, an expansion of public employment makes the symmetrical unconditional distribution of wage income become leftward skewed. Given these findings, an expansion of the public employment caused by the strategy of “guojin mintui” could mitigate China’s income inequality.

Keywords: Wage income; Marginal effects; Employment expansion; Income inequality; Unconditional quantile estimation (search for similar items in EconPapers)
JEL-codes: C13 D31 D63 E24 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:54:y:2020:i:c:s1062940818303681

DOI: 10.1016/j.najef.2019.101002

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