Research On China's Public Sector And Non-public Sector's Wage Differentials

As the economy continues to push forward market-oriented reforms, China's labor income inequality becomes more and more obvious. The wage differentials between our country's public sector and non-public sector have a prominent feature:China Family Nutrition and Health Survey (CHNS) data shows that, prior to 1997, the average wage of China's non-public sector was higher than the public sector, but since 1997, the wage level public sector has become higher and higher than non-public sector. Workers'average wage of public sector in 2006 was 17,856 Yuan, the wage of non-public sector was 14,253 Yuan, the former is 25.26% higher than the latter.Different wage determination mechanism is an important reason that causes the wage differentials, two sector wage determination mechanisms have different characteristics in different periods. In the original plan of our economic system, micro-economic units do not separate their wage decision, they must pay wages to the workers according to the government's plans, differentials of workers' individual characteristics can not be reflected in wages. So the income level is decided by the government, different departments labor's income is similar. Since China's reform and opening, we established the goal of socialist market economic system, the reform of the domestic focus on this goal. On the basis of economic entities, public economy is very important, then we develop non-public economy. Non-public economic sector is largely in accordance with the laws of the market operation; and most of the public economy, collective economy still retains something of the management of the planned economy. Therefore, the operation and management mode, the two sectors-public sector and non-public sector's wage payment mechanisms are quite different, which may lead to differentials of their wage levels.Naturally, higher wage may attract more job seekers. From employment hot spot observed in recent years, we can find that the number of local public servants continues to rise, the relevant data indicates that,2009 and 2010, the proportion of national civil servants was not admitted to 2%. In addition, some jobs in state-owned enterprises are also shortage situation. These phenomena suggest that most job seekers tend to work at the national administrative units, some scholars have pointed out that the main reason for this phenomenon is the public sector income may be higher. According to classical economic theory, free labor mobility will eliminate wage differences between different departments, but at present the actual situation of the labor market determines the free flow can not be achieved, so the wage differentials between the two sectors will not eliminate in short term. Facing to this phenomenon, we naturally ask why the wage between public sector and non-public sector has differentials? What are the reasons for these differentials?In order to study the public sector and non-public sector wage distribution level, this paper analysis the wage differences in the level of the real situation. According to human capital theory, we analysis the wage differences making empirical research as the main analytical tools, and explore China's public sector and non-public sector wage changes in the number of different laws, find the reasons for this differences and measure the number of generated boundaries for understanding the development of differences between the public sector and the non-public sector to provide empirical basis for the establishment of scientific and rational distribution system, reduce the widening income gap under different ownership, so this paper has major practical significance.Based on the literature, we analysis the public sector and non-public sector's wage determination mechanisms, and the impact on the wage differences between the number of individual factors, then improve the Mincer equation of wage determination for the establishment of the theoretical model, using econometric analysis with Chinese Family Nutrition and Health Survey (CHNS) database respectively make the RIF regression in 1993 and 2006 the wage equation of the two departments, and make the complete decomposition of wage differentials based on regression results. The main sections are as follows:The first chapter details the research background articles and contents, the brief description of research ideas, and this article features.The second chapter is the literature review and summarize, this part summarizes the literature according to the country from abroad, and two major aspects of the problem of wage differentials and. In this chapter, we summary the characteristics and shortcomings of existing literature and make these content of the starting point.ChapterⅢis the article's theoretical analysis. This chapter begins to explain wage differences between the Western theory of the four classic comb to have a clear understanding of the origin; and then combined with the actual situation in China is discussed in depth the public sector and non-public sector wage their own payment mechanism, in theory draw the two sectors on the general situation of wage differentials; Finally, we consider the situation of our country under the premise of individual characteristics that affect wage analysis of the factors, an empirical model for the back to provide a theoretical basis.Chapter IV is the article's empirical analysis. This chapter first talks empirical study methods to sort out the problem, and then leads to the main research method, and a brief introduction; then establishing theoretical analysis of Chapter III of this paper an empirical model; then we make the RIF regression with the Chinese Family Nutrition and Health Survey (CHNS) data, and r make the decomposition of differences based on the regression results, finally, we come to some positive conclusions, the final conclusions confirm the theoretical analysis of the basic assumptions.The fifth chapter is the part of the main conclusions and policy recommendations. Based on the conclusions of the study, we make the corresponding policy recommendations, and proposed the inadequacies of the article and subsequent research.Compared with the previous literature, this paper has the following two characteristics:first, with human capital theory and the actual situation, we take into account human capital and other individuals associated factors. Most existing studies of wages due to the return on human capital, but there are other individual factors determining the level of wage, according to economic theory and the actual situation in China, this article analyzes several important factor, and measured in empirical studies of these factors on the impact of wage differences, more scientific research aimed at human capital on wage differences. Secondly, this paper makes empirical research using Recentered Influence Function Regression and the decomposition on the basis of it, we first make the quantile regression of two sectors'wages equation respectively, then do the decomposition of wage differentials. Original decomposition method based on quantile regression wage differences can only be generally decomposed, the decomposition method based RIF quantile regression can explain the differences in each variable, so it can better analyze the use of human capital on wage differentials.