Research On Wage Determination System Of Segmented Labor Market In China

Chinese labor market has the systemic segmented character as a result of china transition economy. The facts observed are as: First, macroscopically, enterprises in intra-system labor market are restricted by government term in many aspects because of planned economy and enterprises in extra-system labor market run according to market economy, which results in great difference on wage determination system of both. Furthermore, increased marketization degree and improved labor flow will shorten wage difference theoretically. Although our labor market reform have went on more than twenty years, our facts are that enterprises' wage determination systems in both of intra-system and extra-system labor market become consistent because of marketization reform. Second, microcosmically, people can improve their human capital to enhance their labor productivity and increase their income(Schultz, 1961; Becker, 1993) according to human capital theory. But the facts observed are that labors belonged to same human capital gain great difference income because of their working in difference labor market and department (called as same job different income) since twenty years reform. Obviously, the entire problem is relevant to wage determination system. Wage determination system is the core of labor market. Analyzing wage determination system is the basis of understanding labor market and economic function. There are significant to understanding wage reform through analyzing human capital returning rate in segmented labor market and it is important to know about the change of wage determination system in the course of reform.This paper analyzes evolvement process of wage determination system from history view, investigates wage determination system differences in above mentioned labor markets from microcosmic and macroscopical view on the background of transition economy system and on the research object of systemic segmented labor market, measures marketization degree of wage determination system and explains some phenomenon in this course, which are significant to labor market reform theoretically and realistically. The research framework of the paper as follows:The importance and meaning of this research first were given in the first chapter, and then research object is confirmed. This chapter outlines relevant research home and abroad and put up the content and method of this paper. Finally, proposes the innovations and shortcomings of this dissertation. Chapter two introduces the theory basis and data which is used in the demonstration section. Chapter three and four analyze wage determination system in segmented labor market from macroscopical view, thereinto, chapter three mainly uses efficiency wage model to analyze the difference of wage determination system in the two labor market and finds some conclusion accord with fact. Chapter four analyzes the change of wage determination system from labor flow and still from macroscopical view following chapter three. Otherwise, Chapter four and five analyze wage determination system from microcosmic view, thereinto, chapter five demonstrates the difference of wage determination system of the two labor market through analyzing the difference of human capital return rate and non-human-capital factor effect, then chapter six attempts to demonstrate and measure marketization degree of wage determination system in our labor market. The last chapter illustrates the research findings of this dissertation and policy meanings.This paper uses relevant research's method for reference and takes into account the character of segmented in our labor market, and uses Heckman two-step to overcome selectivity problem, finally uses stochastic frontier approach(SFA) to measure marketization degree of wage determination system. The main conclusion of this paper is that: the systemic segmented character of our labor market is still exist not only macroscopical and microcosmic view. There exists difference of wage determination system in the two segmented labor market, but is reducing remarkably. The measured marketization degree of wage determination system is consistent with the path of our country's path. The innovations of this dissertation are:1. to explain the dynamic process of wage determination system and some phenomena in the course of reform through establish a simple efficiency wage model and according to three phases since Chinese reform.2. to demonstrate the exist of systemic segmented character of Chinese labor market through Heckman two-step method correcting selection bias and the difference of wage determination system between system segmented labor market.3. to try to adopt stochastic frontier approach to demonstrate the evolvement path of marketization of wage determination system. Our conclusion is as follow: obvious turning point is 1993, before which marketization is low and after which it is increasing from relative value, and it is low comparing with developed country from absolute value.