An Empirical Analysis of Employment Stability and the Wage Gap of Rural Migrants in China Based on Quantile Regression*

Liu Baihui 1 and Kou Enhui 2
1 National Academy of Economic Strategy, Chinese Academy of Social Sciences, Beijing, China
2 School of Taxation, Central University of Finance and Economics, Beijing, China

 
Abstract: Under the background of accelerated integrated urban-rural development, this paper offers an analysis on the short-term employment of rural migrants in China and resulting wage gap between long-term and short-term rural migrants. On the basis of correcting for sample selection problems arising from labor market participation and short-term employment, rural migrants’ wage function is estimated using quantile regression method, and wage gap between long-term and short-term rural migrants is decomposed using MM method. Our empirical results suggest that those with a higher level of education, training experience and local employment recommended by family relations or in formal labor market are more likely to secure long-term labor contract; region and education have significant contributions to the wage of rural migrants; rural migrants of both long- and short-term contract types have great gaps at the bottom of salary distribution; and there exists a sticky floor effect in wage difference of rural migrants. These results have important policy implications in enhancing employment stability of rural migrants, improving income distribution equity, speeding up the process of urbanization, and balancing regional development.
Keywords: rural migrant workers, wage gap, quantile regression, sticky floor effect

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