The Supply and Demand Factors Behind the Relative Earnings Increases in Urban China at the Turn of the 21st Century

All of the demographic and skill groups in China's urban labor market received increases in their real earnings from the mid-1990s to the early 2000s. This paper analyzes these relative earnings increases with respect to the relative supply and demand changes for each of these imperfectly substitutable labor inputs. The relative movements of both supply and demand were consistent with the relative earnings increases across experience groups, but only the relative demand movements were consistent across education groups, and neither of the movements could help explain the gender differences.