Research On The Change Of Wage Gap Between Formal Employment And Informal Employment In Urban China

With the industrial transformation and upgrading and economic restructuring,in the process of industrialization,urbanization and rural revitalization strategy,China's employment pattern has shown a diversified trend.The changes in the wage gap between formal employment and informal employment and its influencing factors have become an issue of close concern to the theoretical circles.Answering this question is of great significance in improving the quality of employment and the income level of workers,balancing flexibility and standardization of the labor market,and promoting market transformation,upgrading and healthy development.Regarding the organizational operation of the labor market and the wage determination mechanism,neoclassical economics and institutional economics have different views.The former considers that the market mechanism is the main determining force of labor prices,the wage difference stems from the difference of human capital,knowledge,skills,etc.The latter believes that institutional division and the discrimination it brings will limit the role of market forces.Employees with the same productivity characteristics will receive different rewards in the segmented market.This study starts from the theoretical basis of the two major schools,constructs the theoretical analysis framework of the formal employment and informal employment wage determination mechanism,analyzes the changes in the labor market and employment patterns in different historical stages systematically,and summarizes the changes in the formal employment and informal wage gap and the characteristics of the decision mechanism.Based on the Chinese Household Income Project Data(CHIP),this paper makes empirical investigation to change of wage gap between formal employment and informal employment,and the influencing factors of wage gap during 2002-2013.The structure of the research can be summarized as "one problem,two perspectives".One problem is that the change of wage gap between formal employment and informal employment,and the the two perspectives refer to the competitiveness and segmentation of the labor market.The first chapter introduces the research background,research purpose and significance,defines and discriminates related concepts,and introduces research ideas,research methods and research innovations.Chapter 2 reviews domestic research and foreign research and proposes the direction of this research.Chapter 3,under the theoretical assumptions of the neoclassical school and the institutional school,explains the decision mechanism of wages from two different perspectives and constructs the theoretical framework of the wage decision mechanism.Chapter 4 compare and analyze the changes in employment patterns,the reform of wage determination patterns and the performance of wage gaps in different stages of development of China's labor market.Chapter 5 uses the Chinese Household Income Project Data(CHIP)(2002,2013)to empirically analyze the changes and influencing factors of the informal employment and formal employment wage gap during the more than ten years after entering the new century.Chapter 6 re-examines the results of empirical research,introduces the wage income of different calibers into the Mincer wage equation to test the robustness,discusses the endogenous problem in the estimation process,and empirically analyzes the influences of household registration system to the wage gap between two types of employment.Chapter 7 elaborates the research conclusions and policy implications,and proposes the research shortcomings and the ensuing research directions.In terms of research methods,this study utilizes a combination of normative analysis,empirical analysis,and comparative analysis.The innovation of the research lies in the theoretical framework of the neo-classical school and institutional school on the wage determination mechanism,taking time as the main line,and sorting out the path of the development of the labor market,the change of employment form,the evolution of the wage determination mechanism,and the change of wage gap between formal and informal employment.In the empirical research section,make up for the shortcomings of previous research on data usage and program design,this paper uses the China Household Income Project Data(CHIP)for empirical analysis,explores and utilizes the unique value and advantages of CHIP data,and introduces different caliber wage income into Mincer equation.The equation estimates the wage gap between the two types of employment multiple times,and the test results are robust.Using CHIP data can reflect the characteristics of employment status change,household registration change,and income change of the same respondent,explore and solve self-selection and endogenous problems,and explore the impact of household registration system on the wage gap between the two types of employment,in an effort to more objectively reflect change of wage gap in two types of employment.The main conclusions of the study are as follows: 1.From the perspectives of the two major theoretical schools,the market forces of wage determination and the power of institutional division coexist.To this end,combined with the actual situation of the labor market,deepen structural analysis and time series analysis,raising ideas on both supply and demand sides is an effective way to solve the problem.2.From the comparative historical analysis,China's labor market has undergone a process of strict institutional isolation to gradual relaxation under the background of industrialization and urbanization.In terms of employment patterns,it has undergone a gradual transformation from “fixed workers” to market-oriented employment,especially the development of new economy has spawned a large number of new employment forms,giving new meaning and characteristics to informal employment.In the wage determination mechanism,the marketization of wage determination has gradually been on the right track,but it is still affected and bound by certain systems.The wage gap between industries,regions and ownership is obvious.To this end,the current policy orientation should be tantamount to pay more attention to eliminating institutional segregation,improving the quality of laborers and labor productivity,and regulating the labor market,rather than maintaining low-cost advantages.3.The results of empirical analysis,the wage gap between formal employment and informal employment rose from 4.5% in 2002 to23.4% in 2013,and the wage gap caused by employment type is significant in different income metrics.With the increase in income,the wage gap between the two types of employment has gradually narrowed,indicating that there is no serious segregation of employment patterns among high-income groups.Using the Yun decomposition method to analyze the specific factors that cause the wage gap,it is found that the endowment effect representing the characteristics of personal productivity is more and more obvious,especially the educational years have played an obvious role.However,in the overall sample,the wage gap in 2002-2013 was mainly due to the coefficient effect,and the gender and age discrimination in the labor market was still serious.The robustness test of the estimation results found that after using different caliber wages as the dependent variable,the two types of employment wage gaps were significant,showing strong stability and reliability.At the same time,it can be observed in the estimation results that formal employment is less intense than informal employment and has higher benefits than wages.Further exploration of endogenous findings,there are some unobservable factors affecting the choice of employment types of workers,but also affecting their wage income,forming a positive or negative relationship,leading to uncertainty in the wage gap between the two types of employment.Focusing on the impact of household registration on the wage gap between the two types of employment,it was found that the effect of the household registration system in 2002-2013 to expand the wage gap between the two types of employment became more and more obvious,that is to say,the discrimination in the labor market became more and more in the past ten years.To be serious,this is basically consistent with the conclusions obtained by the Yun decomposition.It is a long-term and arduous task for us to take concrete steps to eliminate various discriminatory and hidden obstacles.