Wage discrimination against migrant workers in China's urban labour market: a distributional approach

Since the 1980s, many migrant workers have flooded into China's urban labour market. Most of them are treated differently from urban locals by urban authority and employers due to their household registration (hukou) status. This study, from a distributional approach, utilizes two survey datasets to analyze to what extent the discrimination contributes to wage distribution differentials between urban locals and urban migrants/rural migrants and its changing pattern. Between 1993 and 2006, the extent of discrimination against migrant workers showed an inverted U-shape at different quantiles, reaching the highest level in 1997. Compared with urban locals, only rural migrants above medium income level and urban migrants below medium income level tended to face discrimination. Compared with urban migrants, rural migrants were discriminated at all quantiles. The results indicate that the hukou system still plays a role in segmenting China's urban labour market. The extent of discrimination against urban migrants compared with urban locals is greater than that against rural migrants compared with urban migrants, suggesting that the segmentation of urban labour market is largely determined by the division between locals and non-locals nowadays rather than division between urban hukou and rural hukou status which was the case in many decades previously.