The influence of discrimination against migrants on the wage gap in Chinese urban labor market: A double selectivity approach

Abstract

This study explores the influence of discrimination against rural migrants on the wage gap in the Chinese urban labor market. This study empirically examines the extent to which discrimination against rural migrants influences the wage gap between the formal and informal sectors for the type of grouping between rural hukou holders and other hukou holders. For this purpose, we apply the Oaxaca-Blinder decomposition method, taking the formal/informal sector wage gap and the probability of entering each sector into the method (Brown model). In addition, we adopt a double-selectivity approach to examine the possibility of two selection biases. The results reveal that the unexplained components still significantly influence the wage gap, irrespective of whether double selectivity bias is considered. This indicates that our findings are inconsistent with those of existing studies, showing that the influence of discrimination against rural hukou holders on wage differentials has already vanished.