Glass ceiling effect in urban China: Wage inequality of rural-urban migrants during 2002-2007
Zhaopeng Qu & Zhong Zhao
#2016-069
The paper studies the levels and changes in wage inequality among
Chinese rural-urban migrants during 2002-2007. Using data from two waves
of national household surveys, we find that wage inequality among
migrants decreased significantly between 2002 and 2007. Our analysis on
the wage distribution further shows that the high-wage migrants
experienced slower wage growth than middle-and low-wage migrants - a
primary cause of declining inequality of migrants. By using
distributional decomposition methods based on quantile regression, we
find that the overall between-group effect dominates in the whole wage
distribution, which means that the change in returns to the
characteristics (education, experience and other employment
characteristics) plays a key role, but on the upper tails of the wage
distribution, the within-group effect (residual effect) dominates,
implying that the unobservable factors or institutional barriers do not
favour the migrants at the top tail of the wage distribution. We also
study wage differential between migrants and urban natives, and find
that though the wage gap is narrowed, the gap at the upper wage
distribution is becoming bigger. Overall, the results suggest that there
exists a strong "glass ceiling" for migrants in the urban labour market.
Keywords: rural to urban migrants, wage inequality, quantile decomposition, China
JEL Classification: J30, J45, J61