Does industry monopolization widen wage residual inequality In China?

Chen Zhu, Zekai Wang, Qi Jiang and Chang Xie

International Review of Economics & Finance, 2024, vol. 96, issue PA

Abstract: Fair income distribution is crucial for achieving common prosperity. This study used data from the China General Social Survey and Herfindahl–Hirschman index to explore the relation between industry monopoly and wage residual inequality, with a specific focus on the mediating role of informal employment. We found that industry monopoly significantly increased wage residual inequality, indirectly affecting lower-income groups through informal employment and exhibiting an inverted U shape. The DiNardo–Fortin–Lemieux counterfactual decomposition method shows that changes in residual inequality were primarily due to price effects, whereas structural effects were minimal but helped reduce wage residual inequality. This study provides key insights for understanding industry wage gaps and promoting high-quality employment.

Keywords: Income distribution; Wage residual inequality; Industry monopoly; Informal employment; Herfindahl–hirschman index (search for similar items in EconPapers)
JEL-codes: D31 J31 J42 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:96:y:2024:i:pa:s1059056024004957

DOI: 10.1016/j.iref.2024.103503

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