Sunghyun Henry Kim: Wage inequality has been an important issue in China for various economic and political reasons. This paper studies how wage level in China,—in particular, urban China—has evolved since 1995 and examines which factors have contributed to determining wage level and wage inequality. Among potential variables that can explain wage pattern, the authors focus on education. They examine how much education level (years of schooling) explains wage level differences in various groups. In particular, they study within-group and between-group inequalities in wage, differentiated by education, gender, age, and region. They focus on how such characteristics have evolved over time based on OLS regressions using data from the China Household Income Project Survey for 1995, 2002, 2007, and 2013.
Descriptive statistics show that wage inequality increased until 2007 but slowed down since then. The wage gap among highly educated workers (between college and high school graduates) has continuously increased,...