Wage curve for urban China: a panel data approach

Abstract

The panel data evidence in this article shows that the wage curve does not exist in China when utilizing the provincial unemployment rate. However, the wage curve exists when utilizing the provincial youth unemployment rate. Youth unemployment data are more reliable in China, as they are not distorted by the exclusion of significant numbers of adult laid off workers from the more familiar unemployment statistics. It is also found that the semi-log function is a good approximation for urban wage curve of China. The wage unemployment relationship becomes more negative when utilizing fixed effects and random effects models.

Acknowledgements

The author is grateful to Barry McCormick and Andrew Oswald. Without their encouragement, The author would not be able to achieve this. The usual disclaimer applies.