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Effect of Public Sector and SOEs on Wage Inequality of Urban China: 1988-2007
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TitleEffect of Public Sector and SOEs on Wage Inequality of Urban China: 1988-2007  
AuthorXia Qingjie, Li Shi, Song Li’na and Simon Appleton  
OrganizationSchool of Economics, PKU; School of Economics and Business Administration, BNU;  
Key WordsChina; Public Sector; State-Owned Enterprises; Urban Wage Inequality and Wage Gaps; Quantile Regression; Counterfactual Analysis. 
AbstractThis paper examines the effect of public sector and SOEs on the wage inequality of urban China by using CHIPs data. It applies quantile regressions, Machado and Mata (2005) decomposition and the extension of it to single out respectively the factors representing the change of wage structure and employment shares of the public sector and SOEs that affect urban wage inequality. The econometric results show that after the radical SOEs reform aimed at solving over-manning and improving efficiency in the late 1990s, the sharp fall of the employment share of SOEs reduced urban wage inequality, but the rise of the wage premium to the state sector (versus non-state sector) raised the urban wage inequality. 
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