CHANGES IN CHINA'S WAGE STRUCTURE | Zendy

Ge Suqin | Zendy; Yang Dennis Tao | Zendy

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CHANGES IN CHINA'S WAGE STRUCTURE

Author(s) -

Ge Suqin,

Yang Dennis Tao

Publication year - 2014

Publication title -

journal of the european economic association

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 7.792

H-Index - 93

eISSN - 1542-4774

pISSN - 1542-4766

DOI - 10.1111/jeea.12072

Subject(s) - wage , economics , wage share , labour economics , technological change , wage inequality , human capital , china , efficiency wage , wage growth , inequality , production (economics) , market economy , macroeconomics , mathematical analysis , mathematics , political science , law

Using a national sample of Urban Household Surveys, we document several profound changes in China's wage structure during a period of rapid economic growth. Between 1992 and 2007, the average real wage increased by 202%, accompanied by a sharp rise in wage inequality. Decomposition analysis reveals 80% of this wage growth to be attributable to higher pay for basic labor, rising returns to human capital, and increases in the state‐sector wage premium. By employing an aggregate production function framework, we account for the sources of wage growth and wage inequality amid fast economic growth and transition. We find capital accumulation, skill‐biased technological change, and rural–urban migration to be the major forces behind the evolving wage structure in urban China.

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