| According to the neoclassical economics, in the perfect competition market, wage reflects the real price of labor. Equlibrium real wage equals to the value of labor's marginal productivity. At that moment the labor market is clear. Both employer and employee, as rational economists, achieve maximum profits and maximum utilities, which means in perfect competition labor market, homogeneous labor must be paid equally, which is called"equal pay for equal work".However, in practice, wage differentials are ubiquitous among labors because of their belonging to different ownership, industries, regions, careers. Even when the characteristics of human capital or labor productivity have been controlled, there are still some wage differentials that cannot be explained. It shows that in practice homogeneous labor is not paid equally, and it also means some non-competition factors still exist in the labor market. Especially during the period when Chinese economy system changes rapidly, the factors that influence the competition of the labor market become more complicated. Then how much influence the non-competition factors have on wage setting? How much does wage differential depend on different levels of labor capital? What are the distribution characteristics of unreasonable wage differentials caused by non-competition factors among different skilled labors? Who is the best benefited group by non-competition factors'influence on labor market? Those are main issues that need to be discussed in the paper.Besides, there are two strategies that prompt China's marketing. The first strategy is to introduce market system stepwisely into traditional sectors, which are represented by state-owned economy, and change them stepwisely into marketing-oriented economic sectors. The second strategy is apart from traditional planned system to develop new market-oriented government sectors (non state-owned sectors including rural collective economy, individual economy, overseas-invested enterprises), and it means changing old unique ownership structure among sectors and enterprises to create more comptitive environment (Lishi, 1997). Therefore, different strategies of marketing create obvious difference in wage setting between state owned sector and non-state owned sector. The analysis on the difference helps us to observe the development in labor markets. Therefore, base on study of wage difference of labors in two sectors, the paper discusses the component and characteristics of their distribution, then measure the competition in China's labor market, and judge the effects of market revolution. Therefore, the paper makes four theory assumptions, and tries to demonstrate them.Assumption 1: along with the marketing reform, the competition in labor market becomes more intensive, and it is represented as a trend of rising in returns to human capital.By empirical analysis, this assumption has been proved. In the evaluation of marketlization from 1991 to 2004, the the returns to human capital kept rising in both institutions and state-owned enterprise, especially the high human capital has a more rapidly increasing, and the returns gap between high and low human capital increasingly enlarged. It proves that during the marketing process, the wage system of human capital is enhanced in process of wage setting in state-owned sectors, thus the difference of human capital enables to reflect in wage structure. It reflects the competition in labor market of China is enhanced.However, compare to wage-setting mode of non state-owned sector, characteristics of institutionalization in wage-setting of state-owned sector still play a main role. It represents as the discrepancy between wage increasing and changes of prosperity or depression in labor market. On one side, under the pressure of low economic profits with high unemployment rate, state-owned enterprises still keep a fast wage increase rate. On the other side, the wage of state-owned institutions is determined more by institutional factors, which are irrelative to macroeconomic fluctuation.The institutional factors in wage-setting of state-owned sector will cause the existence of wage premium. It means homogeneous labors will receive different payments because of their different choices of sectors. That means the labors receive"unequal pay for equal work". Assumption 2: with the compitition enhancement in labor market, the magnitude of wage premium should increasingly be reduced.The Blinder-Oaxaca decomposition results indicate that the changes of wage premium are not in accorrdance with the assumption. In the 1990's, the labors in state-owned sector had negtive wage premium, because their value of labor's human capital were artificial depressed. With the promption of marketing, the magnitude of the negative premium reduced and gradully close to zero, which accords with assumption 2. This change indicates the state-owned sector's wage-determination recovered from a distorted state. While the magnitude of the wage premium between the two sectors does not keep to zero, it is enlarged. The state-owned sector's wage premium in Central China calculated by CHNS data achive to 0.2727 log points in 2004, which explains 60% of the wage differentials. And the state-owned sector's wage premium in East China calculated by PSFD data achive to 0.1771 log points in 2005, which explains 18% of the wage differentials. The premium changes reflect the changes in wage-determination mechanism of state-owned sector, which not only caused by market power but also caused by administritive power.Assumption 3: in state-owned sector, because there are some average attributions in wage-setting system, the sector's wage structure is relatively concentrated. So the wage level of high-skilled workers may be lower than their marginal productivities, the wage level of non-skilled workers may be higher than their marginal productivities. The distribution of the wage premium is not uniform among various skilled workers. It is reverse to the level of skills.By using the Machado-Mata quantile decomposition, the assumption has been proved. In the long run, there has been wage premium between state-owned sector and non state-owned sector, and it declines monotonously across the wage distribution. It menas in state-owned sector wage premium decreasing with the workers'skill levels increasing. During the period when wage structure was concentrated and the value of human capital was depressed, the workers with higher skills in state-owned sector achieved more severe"wage punishment". Their deviation of the wage level from the marginal productivities was most serious. With the prompting of marketing, the wage distortion was corrected. The premium curve moved upwards, while the trend of distribution kept unchanged. This shows low-skilled workers inclined to achieve high rate of wage premium, while high-skilled workers inclined to achieve low, zero or negative rate of wage premium.The distribution trend of premium demonstrates it is too generous for the low-skilled workers and too frugal for the high-skilled workers because of the relatively concentrated wage stucture of state-owned sector. Though"wage punishment"of high-skilled workers is lightened for the marketing reform, the"punishment"of the most high-skilled workers is still there. The phenominion may cause such consequences: the first, the professional labors who work in state-owned sector inclined to move to non state-owned sector attracting by the latter's high returns to human capital. Then it is hart to keep outstanding staff inside the sector for the former. And it is also hart to attract high-skilled talents outside the sector. When labor's sector transition is restricted, their productivity will be influenced, which will cause effeciency lost. The second, the distorted wage structure will cause distortion of labor force allocation, such as overfull employment or wait unemployment.Assumption 4: the wage differentials of state-owned sector and non state-owned sector in competitive industries are more represented by the difference of human capital, while in the non-competition industries they are more represented by wage premium.Aiming at the assumption, the paper uses Brown decomposition method to demonstrate it. The result shows in competitive industries equal work are almost paid eqully. 98.78 percent of wage differentials are explained by the difference of labors'endowments, only 1.22 percent are explained by premium. While in non-competition industries there are 76.5 percent of wage differentials unexplained by market factors, only 23.5 percent can be explained by the difference of labor endowments.Further analysis on the industrial differentials by Machado-Mata qauntile decomposition demonstrates in the competitive industries the two types of labors——high skilled and unskilled who are respectively at the top and low tail of wage distribution still cannt receive the market-oriented treatment. The former inclined to be low paid, while the latter to be high paid. But the inclination is not significant, which can't influence the market effeciency very much. In non-competition industries labors in the state-owned sector generally enjoy wage premium, especially the low-skilled workers at the front forty percentile of the wage distribution. They are the best benefited group of the institutional wage payment.By demonstrating the four assumptions, there are some judgments on the degrees of China's labor market competition. The first, it is improved of the labor market competition during the marketing reform. The second, China's labor market is currently in its primary stage. The institutional factors still play an important role in wage determination. The third, the low-skilled labor force in state-owned sector is the best benefited group by non-competition factors'influence on labor market.
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