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Mengdan Li
''What caused the wage convergence between urban natives and migrants in China?''
( 2020, Vol. 40 No.3 )
In the Chinese labor market, the wage gap between urban natives and rural-urban migrants has narrowed 17% from 2002 to 2013. This research focuses on wage convergence and seeks to underpin the reasons. I utilize the Chinese Household Income Project (CHIP) survey dataset and employ Juhn, Murphy, and Pierce (1991) decomposition method to undertake the analysis. I find three main factors that caused the closing wage gap: reduced discrimination (74.45%), favorable wage structure (31.24%), and improvement in job characteristics of migrants (24.56%). But the differentials in schooling quality widen the wage gap by 45.00%. This study further explores the wage gap trends in different skill groups and finds that low-skilled migrants benefit more than high-skilled from the labor market.
Keywords: wage convergence, JMP decomposition, rural-urban migrants
JEL: J7 - Labor Discrimination: General
J3 - Wages, Compensation, and Labor Costs: General
Manuscript Received : Dec 09 2019 Manuscript Accepted : Aug 19 2020

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