Pre-market discrimination or post-market discrimination: research on inequality of opportunity for labor income in China

Yue Yu and Chengkui Liu ()
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Yue Yu: Wuhan University
Chengkui Liu: Wuhan University

Empirical Economics, 2023, vol. 64, issue 5, No 12, 2313 pages

Abstract: Abstract Inequality of opportunity (hereafter “IO”) restricts the realization of social justice, and its mechanism has always attracted attention. Using China Labor-force Dynamic Survey (CLDS) data in 2012, 2014, and 2016, we fully consider the impact of easily neglected educational opportunities on income inequality and creatively get pre-market and post-market discrimination channels. Research shows that IO is a fundamental cause of employees’ income inequality in China. Male–female and urban–rural opportunity inequality can severally explain 31.66% and 17.16% of total IO. Using the optimized Oaxaca–Blinder decomposition method, we obtain that pre-market and post-market discriminations are the main paths of urban–rural and male–female opportunity inequality, respectively. What’s more, the above pathway has different characteristics in different income groups. Therein, affected by the asymmetric information and employer prejudice in the labor market, the proportion of post-market discrimination channels shows a downward trend as income increases. The conclusions provide empirical support for eliminating market discrimination and ensuring equality of opportunity. They also have enlightening significance for relevant policy formulation.

Keywords: Pre-market discrimination; Post-market discrimination; Inequality of opportunity; Signaling value of education; Employer prejudice (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s00181-022-02315-4

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