An empirical research on China sector wage gap: 1993–2006

Sector partition is a source of segmentation associated with institution arrangements, which causes sector wage gaps. Sector wage gap in different periods show different characteristics along with the changes of ownership structure of employment, and the state-owned sector wages experienced a change from the discount to the premium, which embodies the stage characteristic of China´s reform from “the resignation to business tide” to “the laid off tide”. However, among urban residents with local registration, there has been a persistent attachment to the state sector. In this article, we use a CHNS data - a micro level data for China to estimate the treatment effect of sector attribution on sector wage gaps in China. It shows that state-owned sector attribution by itself has been shown the role to improve the sector wages after control the selection bias, indicating that accessing the state-owned sector and become state-owned sector employee has its benefits on the incentives. The reason that the performance differ in different periods is mainly due to the change of the ownership structure of employment and the change of the access probability.