Wage Discrimination And Occupational Segregation Against Rural Laborers

It's an undoubted fact that there exists wide wage gap between urban workers and rural laborers in China. Many factors may contribute to the fact, which involve discrimination and difference in human capital endowments and other personal characteristics. By conducting the empirical research on the labor market of Zhejiang, this paper tries to analyze the multiple factors' impact to the income and occupational attainment of rural laborers, and study the types and degree of discrimination. The aim of this paper is to provide reference and assistance for the constitution and implement of anti-discrimination policies and the promotion of urban-rural workers' equal employment.Based on data set collected from companies in Zhejiang Province, this research calculates the difference of occupational distribution between urban workers and rural laborers, and breaks down their average hourly wage differential into four sections by employing a developed Brown wage decomposition method. Unlike previous literature, this research reveals that although occupational segregation against rural laborers exists, rural laborers are not prohibited from certain occupation due to discrimination. It's also shown in this research that rural laborers' less possession in the amount of human capital endowments could explain approximately 60% of the total wage differential; the unexplained portion of the wage differential is attributed to intra-occupational unequal pay to these two types of workers, which accounts for 40.89% of the total wage differential. To sum up, the discrimination against rural laborers is still in existence, and significantly affects their income. However, when compared with previous similar research, the degree of discrimination in this research is much less. Thus, the solution to shorten the wage differential should start from the following aspects: improve both the level and the quality of rural laborers' human capital possession; deepen registration system reform, ensure the benefits of rural laborers; develop non-public economy and promote competitive labor market, etc.