Market expansion, state intervention and wage differentials between economic sectors in urban China: A multilevel analysis

The rising earnings inequality in China has sparked a heated debate on the socioeconomic outcomes of market transformation. While a large body of literature has focussed on the temporal trend of wage inequality during the reform period, much less attention has been devoted to the structural causes of regional variations in sectoral wage differentials. Using a micro-data sample from the 2005 one percent population sample survey and multilevel methods, this article examines the geographic variability of wage differentials between economic sectors in urban China, with a particular focus on the combination effects of market expansion and state intervention. The results indicate that sectoral wage differentials vary substantially across regions, and that market expansion interacts with state intervention to reconfigure earnings outcomes. Specifically, prefectures located in the interior region tend to exhibit a large wage premium for the state sectors, while prefectures located in the coastal region tend to display a wage advantage of the foreign-invested sector. The wage gap between the state and non-state sectors is smaller in areas with diversified ownership; openness to foreign investment increases the relative wages of foreign-invested-sector employees; stringent government regulation of industries increases the wage gap between the state monopoly sector and the non-monopoly sector; and strong redistributive power increases the wage premium for the public service sector over other sectors. Our findings suggest the necessity to take into account contextually constituted and locally specific wage-setting mechanisms when studying China’s wage inequality. 中国不断攀升的收入不平等弓丨发了关于市场化转型之社会经济后果的激烈争论。大量研宄文献 注重分析改革开放以来工资不平等的发展趋势，但很少有研究关注行业工资差别的地区差异之 结构性原因。本文利用 2005 年对百分之一人口的抽样调查微观样本，采用多层方法，考察了中国城市中不同经济部门之间 工资差别的地理变化，尤其注重考察市场扩张与政府干预的双重影响。结果表明，不同地区的 行业工资差别有着显著不同，而市场扩张与政府干预联合重塑了收入结果。具体而言，内陆省 份往往表现为国有部门工资溢价高，而沿海省份则往往表现为外商投资的行业部门有工资优势 。在所有权多元化的地区，国有和非国有部门之间的工资差距较小；对外商投资的开放使外商 投资的行业部门员工工资相对较高；政府对行业的严格监管增加了国有垄断行业与非垄断行业 之间的工资差距；强大的再分配权力使公共服务部门的工资溢价高于其他部门。我们的发现表 明，在研宄中国的工资不平等时，有必要考虑由特定语境构成、并具有地方特殊性的工资设定 机制。