Earnings Differentials between the Public and Private Sectors in China: Exploring Changes for Urban Local Residents in the 2000s

Sylvie Démurger (1) , Shi Li (2) , Juan Yang (2)

1 GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne
2 School of Economics and Business Administration

This paper analyzes the changes in public-private sector earnings differentials for local residents in urban China between 2002 and 2007. We find that earnings gaps across ownership sectors decreased during this period and that the convergence trend has been in favor of the private and semi-public sectors as opposed to the public sector. This trend is in sharp contrast to what occurred at the turn of the 21st century when employees the government and state-owned enterprises were found to enjoy a privileged situation. Differences in endowments are found to play a growing role in explaining earnings differentials. However, although it is becoming less of an issue, segmentation across ownership remains important, especially for high-wage earners.

Mots clés: labor market; earnings differentials; segmentation; enterprise ownership; China

Domaines: Economies et finances

Sylvie Démurger, Shi Li, Juan Yang. Earnings Differentials between the Public and Private Sectors in China: Exploring Changes for Urban Local Residents in the 2000s. China Economic Review, 2012, 23 (1), pp. 138-153. ⟨halshs-00627719⟩