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Firm Size and Work Compensation in China
Author(s) -
Rickne Johanna
Publication year - 2014
Publication title -
china and world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.815
H-Index - 28
eISSN - 1749-124X
pISSN - 1671-2234
DOI - 10.1111/j.1749-124x.2014.12053.x
Subject(s) - stylized fact , wage , economics , china , private sector , labour economics , work (physics) , compensation (psychology) , point (geometry) , macroeconomics , mechanical engineering , psychology , geometry , mathematics , engineering , political science , psychoanalysis , law , economic growth
Remarkably, recent research on the Chinese labor market has suggested that the situation in China is inconsistent with the stylized fact that large firms pay higher wages and offer more generous benefits. Expanding the empirical basis from 78 to 300 000 industrial firms, I overturn the previous result and show that wage determination in the average firm fits the international norm. Exploring subsamples of firms I also point to a likely source for the conflicting findings: firm size is positively correlated with the average wage in private firms, but negatively correlated with the average wage in the state‐owned sector. These novel results could guide future studies aiming to understand the sources of the firm size wage premium, and, in particular, studies that target the largest industrial labor market in the world.