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Wage Differential between Rural Migrant and Urban Workers in the People's Republic of China

Hong Cheng (), Dezhuang Hu and Hongbin Li ()
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Hong Cheng: Institute of Quality Development Strategy, Wuhan University.
Hongbin Li: Stanford Institute for Economic Policy Research, Stanford University.

Asian Development Review, 2020, vol. 37, issue 1, 43-60

Abstract: Using a recently constructed dataset that draws on the China Employer–Employee Survey, this paper provides new evidence on the earnings gap between rural migrant and urban manufacturing workers in the People's Republic of China. When we only control for province fixed effects, we find that rural migrant workers are paid 22.3% less per month and 32.2% less per hour than urban workers. We find that the gap in hourly earnings is larger than the gap in monthly earnings because rural migrant workers tend to work an average of 5.6% more hours per month than urban workers. Using these data, we also find that 87.4% of the monthly earnings gap and 73.9% of the hourly earnings gap can be attributed to differences in the individual characteristics and human capital levels of rural migrant and urban workers. Furthermore, we find that this unexplained earnings gap varies among different groups of workers. The earnings gap is much larger (i) for workers in state-owned enterprises than in nonstate-owned enterprises, (ii) for college-educated workers than workers with lower levels of educational attainment, and (iii) in Guangdong province than in Hubei province.

Keywords: China Employer–Employee Survey; rural migrant workers; wage gap (search for similar items in EconPapers)
JEL-codes: O15 J01 J31 (search for similar items in EconPapers)
Date: 2020
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