Human Capital and Wage Determination in Different Ownerships, 1989–97

Abstract

This article evaluates the Chinese labour market by examining the role of human capital in wage determination. Using data from China's Household Nutrition Survey, we estimate the returns to education in state-owned, collective-owned and private sectors. In the private sectors, the returns to education increase from 0-2 per cent in the late 1980s and early 1990s to about 4 per cent in 1997, while those of public sectors do not increase. This suggests that the labour market is segmented and human capital is more explicitly rewarded in the private sector. We correct for self-selection error using switching model, but the main results remain unchanged.

Ownership restructuring and wage inequality in urban China

“…Chen, Démurger and Fournier (2005) also find that FIEs and collective enterprises offered higher returns to education than state-owned enterprises. Similar findings also are reported by Meng (2000), Xing (2008), and Yang, Démurger and Li (2010). 2 This article investigates how ownership restructuring has contributed to China's rising urban wage inequality.…”

Earnings Differentials between the Public and the Private Sectors in China: Explaining Changing Trends for Urban Locals in the 2000s

“…Given the comparatively high wages in these two sectors, plus non-observable income, jobs in SOEs and GAIs can still be as attractive as, or even more attractive than jobs in FIEs. 7 This trend confirms the more unequal distribution of hourly wages in the private sector as compared to the public sector that had been observed in the nineties (see Chen et al 2005;Xing 2008). …”

The Regional Distribution of Skill Premia in Urban China and Implications for Growth and Inequality*

“…In 2008, for example, the registered employment share of SOEs was around 30 per cent in most coastal provinces, whereas it was still above 70 per cent in other provinces such as Jiangxi, Guangxi, Shaanxi, Gansu, and Qinghai (National Bureau of Statistics, 2009). 4 Thus, if wage determination mechanisms were significantly different across firm ownership types, with private sector firms and joint ventures sharing a higher skill premium (Meng, 2000;Dong and Bowles, 2002;Xing, 2008;Zhang et al, 2005), skill premia would vary across regions.…”