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Frontiers of Economics in China

Front Econ Chin    2010, Vol. 5 Issue (4) : 582-603     DOI: 10.1007/s11459-010-0114-0
research-article |
Ownership and Earnings Inequality in Urban China
Jin Song1(), Shi Li2()
1. School of Economics and Business Administration, Beijing Normal University, Beijing100875, China; 2. School of Economics and Business Administration, Beijing Normal University, Beijing 100875, China
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Along with advances in urban state-owned enterprise reform, fast growth of private sector and changes in the wage structure, earnings inequality in urban China has been increasing. Using data from the 1988 and 2007 waves of the urban household survey conducted by China Household Income Project, this paper attempts to examine the impact of the change in ownership structure on earnings distribution in urban China. We find that developing non-state-owned enterprises (nonSOEs) or privatization of state-owned enterprises (SOEs) enlarge earnings inequality, but the difference in earnings level between the two sectors is small. Although workers in SOEs receive higher income than in nonSOEs, the difference is more caused by endowment difference rather than coefficient differences. Introducing market power to wage determination system is more influential to the rising earnings inequality which leads more rewards on working experience and educational attainment.

Keywords ownership      earnings      inequality      urban China     
Corresponding Authors: Jin Song,; Shi Li,   
Issue Date: 05 December 2010
 Cite this article:   
Jin Song,Shi Li. Ownership and Earnings Inequality in Urban China[J]. Front Econ Chin, 2010, 5(4): 582-603.
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