Monopoly Industrial Sector and Its Influence on the Wage Gaps Between Migrants and Local Urban Residents

Although Chinese government has promoted the privatization of state-owned enterprises since the end of the 1990s, in the important industry sectors, which are related to the country’s security and economy, the Chinese government has enforced management and control by financing preferential policies and industry entry regulations. Particularly, a set of macroeconomic stimulation policies after the global financial crisis of 2007–2008 concentrates the government public investment support for these monopolistic industry sectors. Thus there exists segmentation between the monopoly industry sector and competitive industry sector. In addition, there also exists a segmentation between the migrants and local urban residents by the Hokou system (registration system) in China. Chapter 4 considers the two kinds of labor market segmentation, and investigates how the industry sector segmentation influences the wage gap between the migrants and local urban residents. It is found that the individual productivity characteristic differentials (e.g. human capital) in the same industry sector is the main factor causing the wage gaps in both 2002 and 2013, and the problems of discrimination against migrants in the same industry sector become more serious from 2002 to 2013.