Are Chinese Workers Compensated for Occupational Risk?

Haining Wang, Zhiming Cheng and Russell Smyth

No 49-14, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This study contributes to an important, but under-researched, topic on China by empirically examining the theory of compensating wage differentials for occupational risks in urban labour markets. Drawing on two datasets – one national for all workers and one from the Pearl River Delta for migrant workers - we examine the relationship between wages and occupational risks, and estimate the risk premium for health hazards. The results show that having risky jobs, especially those associated with dust, has a significant negative effect on hourly wages. The negative risk premium accounts for approximately 10 per cent of all workers’ hourly wage in safe jobs using the national dataset and 1.8 per cent of migrant workers’ hourly wage in safe jobs in the Pearl River Delta. With the national data, males, migrant workers and manual workers incur a wage penalty for exposure to dust, chemical substances, biological hazards and other health hazards. Only urban locals earn a significantly positive wage premium for exposure to chemical substances. We offer several explanations for the negative wage premium in the context of China’s urban labour market.

Keywords: China; urban labour market; occupational risk; occupational health; compensating wage differentials (search for similar items in EconPapers)
Pages: 39 pages
Date: 2014-11
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Citations: View citations in EconPapers (2)

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