Working Paper

“Anatomy of the Wage Gap between Local and Migrant Workers in Urban China.”, with Shu Cai. Under Review, World Development

Abstract: This paper examines the wage differentials between local and migrant workers in urban China using unique data from a survey that was designed to be representative of migrants and local residents in the same township or street from eight prefectures. The results show that, without considering differences in distribution of job attainment between the two groups, the majority of wage gap can be explained by differences in personal characteristics. The wage differential is primarily driven by a large gap in education and current job experience among high-wage workers. Examination of labor market segmentation indicates that, while both across-group differences and within-group differences can be explained mostly by observable characteristics for segmentation in occupation, industry, and ownership of work unit, a significant component of the across-group wage differentials due to segmentation in jobs of different work time or tenure is unexplained by productivity-related characteristics.