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Migrants as second-class workers in urban China? A decomposition analysis

Sylvie Demurger 1, Marc Gurgand 2, 3, 4, Li Shi 5, Yue Ximing 6

(2008-03)

In urban China, urban resident annual earnings are 1.3 times larger than long term rural migrant earnings as observed in a nationally representative sample in 2002. Using microsimulation, we decompose this difference into four sources, with particular attention to path dependence and statistical distribution of the estimated effects: (1) different allocation to sectors that pay different wages (sectoral effect); (2) hourly wage disparities across the two populations within sectors (wage effect); (3) different working times within sectors (hours effect); (4) different population structures (population effect). Although sector allocation is extremely contrasted, with very few migrants in the public sector and very few urban residents working as self-employed, this has no clear impact on differential earnings. Indeed, the sectoral effect is not robust to the path followed for the decomposition. We show that the migrant population has a comparative advantage in the private sector: increasing its participation into the public sector would not necessarily improve its average earnings. The second main finding is that the population effect is robust and significantly more important than wage or hours effects. This implies that the main source of disparity between the two populations is pre-market (education opportunities) rather than on-market.

1:	Groupe d'analyse et de théorie économique (GATE Lyon Saint-Etienne)
	CNRS : UMR5824 – Université Lumière - Lyon II – École Normale Supérieure - Lyon
2:	Ecole d'Économie de Paris - Paris School of Economics (EEP-PSE)
	Ecole d'Économie de Paris
3:	Centre de Recherche en Économie et Statistique (CREST)
	INSEE – École Nationale de la Statistique et de l'Administration Économique
4:	Paris-Jourdan Sciences Economiques (PSE)
	CNRS : UMR8545 – École des Hautes Études en Sciences Sociales [EHESS] – Ecole des Ponts ParisTech – Ecole normale supérieure de Paris - ENS Paris
5:	School of Economics and Business
	Beijing Normal University
6:	School of Finance
	Renmin University of China

Subject

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Humanities and Social Sciences/Economies and finances

Keyword(s): Chinese labor market – earnings differentials – migration – discrimination

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From: Caroline Bauer <>

Submitted on: Monday, 18 April 2011 14:08:17

Updated on: Monday, 18 April 2011 14:42:29