This paper analyzes the differentials in earnings distributions between public and private sector employees in China for the years 1995, 2002, 2007 based on CHIPS data. Using the quantile regression and counterfactual decomposition technique, we find that the public sector employees get higher wage than those in private sector and the differentials in 2002 is the highest among these three years. Counterfactual decomposition results show that compositional effect together with price effect explain raw differentials. We also get the conclusion that wage inequality in private sector is higher than that in public sector, it increases from 1995 to 2002 and then decreases from 2002 to 2007, wage inequality differentials of females is largerer than that of males.

Key words: quantile...[ Read more ]

This paper analyzes the differentials in earnings distributions between public and private sector employees in China for the years 1995, 2002, 2007 based on CHIPS data. Using the quantile regression and counterfactual decomposition technique, we find that the public sector employees get higher wage than those in private sector and the differentials in 2002 is the highest among these three years. Counterfactual decomposition results show that compositional effect together with price effect explain raw differentials. We also get the conclusion that wage inequality in private sector is higher than that in public sector, it increases from 1995 to 2002 and then decreases from 2002 to 2007, wage inequality differentials of females is largerer than that of males.

Key words: quantile regression, counterfactual decomposition, public-private wage differentials