Wage Differentials Between Formal Employment And Informal Employment And Influence Factors Thereof

Since the reform and opening up,with the relaxation of national system of household registration management,a large number of migrant workers entering cities to work,as well as the state cancel the system of guaranteeing job assignments to college graduates,causing tens of thousands of college graduates facing market-oriented employment options,and the improved labor productivity etc.,all these have created a burden for increasing jobs,thus lead to the rapid growth of informal sector.At present,informal employment has occupied decisive position in our country,making g}reat contribution to the development of economy,absorbed more unemployed people,solved large numbers of migrant workers'work.However,there're significant differences between formal employment and informal employment in the aspects of benefits and labor conditions etc..Based on the 2010 CGSS,this paper utilizes propensity score matching to carry out one-to-one matching to formal employment and informal employment,finding out the influence factors of wage differentials caused by them,carrying out mean decomposition to the wage differentials of formal employment and informal employment to find the main influence factors and influence degree,and that is to say the differentials caused by them is the inexplicable factors such as discrimination,labor market segmentation or caused by reasonable factors such as human capital,Individual endowment.Results show that,formal employment wage is much higher than informal employment,wherein institutional factor is the biggest influence to the wage differentials of the two.And wage differentials is mainly caused by reasonable differentials through mean decomposition.So,the paper puts forward policy suggestions from government level,enterprise level and employment level respectively by the above conclusions,so as to make contributions to narrowing the wage gap between formal employment and inf'ormal employment and improving the situation of informal employment.