Analysis Of The Wage Differentials Based On Household Survey Data Between Migrant Workers And Urban Workers

Since the reform and opening-up, China’s economy has made tremendous achievement, and the level of individual earnings and their living standards have been significantly improved. However, along with the rapid economic development, the widening wage differentials have trigged a great deal of attention domestically and internationally. It its believed that the widening wage differentials, in particular, the wage gap caused by institutional factors such as Hukou registration system is harmful to the society’s stabilization and will cause great negative impacts on realizing equal and justified, harmonic and sustainable economic development.The reasons of wage gap between migrant workers and urban workers, on the one hand, are due to the different individual characteristics between them, while, on the other hand, are due to the various forms of discrimination existed in the labor market. This thesis, based on China National Nutrition and Health Survey (CHNS) and the methods of Oaxaca-Blinder and Brown decomposition, empirically analyzes the extents of wage gap caused by Hukou registration system. Firstly, the paper carried out theoretical analysis mainly from the perspective of labor economics and the angle of the Hukou system; Secondly the descriptive analysis and regression analysis are followed; Finally, the integrated empirical analysis on the wage gap is carried out based on the descriptive statistics and the methods of Oaxaca-Blinder decomposition and Brown decomposition.The empirical results show that:from the years 2000-2009, in general, the wage gap between migrant workers and urban workers showed an increasing trend, and the increasing gaps were more significant in the groups of middle-income and low-income groups. Secondly, the decomposition results revealed that, on average, about 58- 67% are due to the wage discrimination as a result of Hukou registration system; and in the more developed regions of the economic development, the migrant works region suffered less discrimination.The empirical results of using Brown method demonstrated that the labor market discrimination against migrant workers varied in different’ occupation groups:within the group of high-income occupations, the differences in individual characteristics explained largely for the wage gap, whereas in the group of low-income group, the discrimination against migrant workers played a significant role in explaining the wage gap between migrant workers and urban workers.