The Wage Differentials Between State Sector And Non-state Sector

With China’ economy continue rapidly, enterprise workers’ wages have been raisesignificantly. However, there has been a serious market segmentation between statesector and non-state sectors of the urban labor market, while the income of urbanresidents rise, Based on the wage gap theory and empirical research methodssystematically, using application of micro-econometric methods, to analyze, wagedifferences between Chinese authorities and the non-state sector of Chinese urbanlabor market and its influencing factors.Wage differences between labor groups have naturally been a serious concern ofmany economists. In the course of wage gap theory development, there are three maintheories widely used, they are compensatory wage gap theory, neoclassical theory ofwage disparities, discrimination and labor market segmentation theory lead to wagedifferentials.Compensating wage differentials theory, that is the degree of job security,job responsibilities and work successfully in the workplace, the possibility of theexistence of differences will lead to significant differences in labor wages the samelevel. Neoclassical theory that wage differences, that is wage labor and human capitalthe individual level have related to the production process and individual effort is afunction of wages, wage increases will therefore increase productivity. Discriminationtheory believes that labor market discrimination against certain groups in the laborforce led to the wage differentials between individuals. Labor market segmentationtheory suggests that labor market segmentation allows companies in different marketswith different monopoly, which can be paid different wages for the labor force.Based on wage differences the theory of the labor market, the large number of economists have given a decomposition method of wage differentials between groups,including traditional wage differentials empirical research methods, wage differentialswage distribution experience research methods, taking into account the differences inwage labor market segmentation experience research methods and regional economicfactors to consider wage differentials empirical research methods. With thedevelopment of empirical research methods, based on different data economists wagedifferences between groups in the labor market are analyzed. In this paper, we considerthe reality of China, the Chinese labor market Chinese wage differences betweensectors and non-state sector of system analysis.Firstly, according to the2007Chinese urban household income survey data(CHIP), establish Mincer wage equation and apply Heckman two-step method toeliminate sample selection bias, regression equation for wages, refer to wagedifferentials learn Oaxaca and Blinder decomposition method, the state-owned sectorand overall wage gap decomposition of non-state sector. The results show that thereis an obvious difference between the state sector wage and non-state sector workforce.State sector wages significantly higher than the non-state sector wages and wagedifferentials human capital differences in the state sector and non-state sectors resultedin0.11, accounting for45%of the overall wage differentials, labor marketsegmentation caused by ownership sectors the difference between the wages of0.13,accounting for55%of the overall wage differences. Therefore, the governmentdepartments to design and implement fair employment system and the wage system,the elimination of barriers to labor mobility, will not only help state-owned sector andthe non-state sector wage differentials narrowed, but also help China ’s economycontinues to grow healthy and stable.Secondly, according to the2002and2007survey of Chinese urban householdincome data, applications, micro-economic approach and wage differences between measured decomposition analysis of changes in the state sector and the non-state sectorwage differences. The results showed that between year2002-2007, the number ofdifferences between the hourly wage of the state sector and the non-state sector fellfrom0.29to0.23, but the wage differentials between sectors and ownership factors isincreasing, indicating narrowing of wage differentials between sectors mainly by thecharacteristic differences between the two sectors of the labor narrow lead. Therefore,the government departments in the state sector efforts to improve labor efficiency,efforts to eliminate barriers to labor mobility between the state sector and the non-state sector, to eliminate the monopoly of state-owned enterprises on the market willhelp the wage difference between the state-owned sector and non-state sectornarrowing.Moreover, according to the2007Chinese urban household income survey data toestablish the wage equation quintile regression model, and apply MM decomposition, todecompose of the state sector and the distribution of non-state sector wage differences.The results show that the median wage in all of the distribution of the non-state sectorwage was lower than the average wage in the state sector. With the improvement ofsites, and the non-state sector wage differentials between the state sectors showed adeclining trend. With the increase in wage levels, department wage differentialsnarrowed between departments reduced mainly by the individual characteristics lead todifferences in the labor force. Therefore, for low-income groups, the governmentshould strive to improve the level of education and experience of non-state sectorworkforce, promote the improvement of their wages;For high-income groups, shouldeliminate the wage gap monopoly ownership split factors brought to wages moremarket-oriented, in order to effectively reduce the wage gap between the state sectorand non-state sectors.Finally, according to the2007Chinese urban household income survey data, to build multi-tier model of urban wage equation, the state-owned sector and thenon-state sector wage equation regression respectively, and then analyze the impact ofthe regional economic environment sector wage differences. The results show thatincreasing the level of regional markets all have significant positive impact on thewages of non-state sector and the state sector, but will also make the ownership splitbetween the department and other factors led to the wage gap increases; rise inunemployment in the state-owned wage differences between wage sector obtain asignificant positive impact, while the non-state sector wages to obtain a significantnegative impact, thus increasing regional unemployment rates and other factors willmake the ownership split led sector increases. Therefore, the government focus onimproving the level of human capital, while the balanced development of all regionsshould improve the underdeveloped areas of the market level, and also focus on socialequity, increase labor resources flow between different regions, and it will help narrowthe wage gap in the state sector and the non-state sector.Results of this study will not only help understand the sectors and non-state sectorwage differences of Chinese market, grasping the laws governing the operation of thelabor market, but also contribute a lot to the evaluation and design of public policies ofChinese labor market. It has theoretical and practical significance.