Wage Differentials and Ownership Structure in Chinese Enterprises

This paper analyses the determinants of wage differentials among different ownership enterprises in urban China in 1955,using an extended version of Oaxaca-Blinder decomposition methods. We find higher wages in state-owned and foreign-invested enterprises compared to urban collectives, but no significant difference in hourly wages between central state-owned and foreign-invested enterprises. Moreover, we find strong evidence for segmentation on the Chinese labor market, the conjunction of segmentation and differences in hours worked being the major determinant of observed differences. We also show that, although foreign-invested enterprises allow for higher global annual income, it is at the cost of longer working hours.