Labor market segmentation by industry sectors and wage gaps between migrants and local urban residents in urban China

This paper explores the influence of labor market segmentation by industry sectors on the wage gap between rural-to-urban migrants and local urban residents in China in the 2000s. Using Chinese Household Income Project (CHIP) survey data and the results based on the Brown decomposition method, the results indicate that the influence of intra-industrial differentials is greater than the influence of inter-industry differentials in both 2002 and 2013. The influence of the explained component of the intra-industry differentials is larger in both 2002 and 2013, and the influence of the unexplained component of the intra-industrial differentials rises steeply from 2002 to 2013. These results show that the individual characteristic differentials (e.g. human capital) in the same industry sector is the main factor causing the wage gap in both 2002 and 2013, and the problem of discrimination against migrants in the same industry sector became more serious from 2002 to 2013.