Wage Differentials Between Formal Employment And Informal Employment In The New Economic Context

Employment is the foundation of the people's livelihood and the source of wealth.At the second meeting of the 13 th National People's Congress,Premier Li Keqiang put forward the general requirements and policy orientation of China's economic development in the new year.For the first time,the employment priority policy has been put on the macro policy level,and various schemes have been implemented to stabilize and expand employment.Secondly,in the Central Economic Work Conference in December 2018,it was emphasized that stable employment should be placed in a more prominent position to strengthen security and improve people's livelihood.It can be seen that the employment issue is related to people's livelihood and cannot be underestimated.With the development of China's economy,informal employment has gradually become an important form of labor employment,but compared with formal employment,informal employment has low income,poor stability,and social security.We should pay attention to the lack of other issues,and the difference in wages is related to social stability.It is also very necessary to study the differences in wages between formal employment and informal employment and find out the influencing factors.This paper mainly discusses the wage difference between formal employment and informal employment in China.It uses the personal data of CLDS in 2016 to conduct empirical analysis to find out the influencing factors of wage differences among different types of workers,and analyses whether informal employment is a self-choice effect or a punitive effect.Finally,according to the results of empirical analysis,it puts forward relevant policy recommendations.The first chapter introduces the research background,puts forward the research contents and ideas,and points out the research significance and innovation.The second chapter is literature review.This paper summarizes the previous studies from three aspects: the definition of informal employment,the factors influencing the choice of informal employment,and the wage difference between formal employment and informal employment.The third chapter is the research design.It points out the theoretical basis of this study,draws the framework of this study,and discusses the model setting and variable definition.Chapter four analyses the influencing factors of formal employment and informal employment choice.Firstly,descriptive statistical analysis of their characteristics.Secondly,Logistic model is used to estimate the influencing factors of workers' employment choices.The results show that in terms of human capital,the lower the education level,the higher the probability of informal employment.In terms of individual characteristics,such factors as household registration and political outlook significantly positively affect workers' employment choices;in terms of working characteristics,the number of working days per month is negatively correlated with workers' employment choices;in terms of social security characteristics,both medical insurance and old-age insurance significantly positively affect workers' employment choices.The fifth chapter analyses the wage difference between formal and informal employment.Firstly,the wage gap is analyzed by statistical description.Secondly,the total sample,the sample of different gender and the sample of different education level are analyzed by using Heckman two-stage regression model.The results show that there are problems in sample selection.Finally,we use the quantile regression method to observe the change of wage difference at each point,and add the inverse Mill's ratio by to revise the regression.The analysis shows that the selection effect of low-income workers is not significant,while that of high-income workers is significant.Moreover,at the top of wage income,the wage level of informal employees is no longer lower than that of regular employees,which means that the wage level of informal employees is no longer lower than that of regular employees.Low-income workers are punished,while high-income workers are more the result of choice.Chapter 6 analyses the impact of macro-economy on the wage gap between formal employment and informal employment.Firstly,we use multi-level Logit model to observe the impact of macro-economy on workers' informal employment choices.Secondly,using the multi-level mixed model and adding the interactive variable analysis of micro-level and macro-level,the regression results show that when the domestic economic situation is good,the wage income of workers will be increased,and the wage difference between formal and informal employment will be reduced,and the macro-economic adjustment effect on wage difference is significant.The seventh chapter is the summary and suggestion.According to the empirical analysis results of the previous chapter,five conclusions are summarized,and corresponding suggestions are given from three aspects: government,enterprises and workers.Finally,the shortcomings of this study are pointed out.The innovations of this paper are as follows: firstly,in defining the concept of informal employment,it is divided into informal employees and self-managers according to its heterogeneity;secondly,it uses Heckman two-stage selection model to correct the problem of sample selection,and brings inverse Mill's ratio by into quantile regression to correct it,and finds the selection effect of workers;lastly,it uses multi-level model to observe the impact of macro-economy on the choice of informal employment and wage differentials,we found that macro-economy has a moderating effect on wage differentials.