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The Assessment of Migrant Workers’ Salary Depended on the Compensating Wage Differential Theory

Author: WangZuoZuo
Tutor: QianXueYa
School: Zhejiang Technology and Business University
Course: Statistics
Keywords: migrant worker’s wage the theory of compensatingwage differentials occupational segregation opportunity cost reasonablewage gap
CLC: F323.8
Type: Master's thesis
Year: 2013
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Abstract


Nowadays, the problem of the shortage of migrant workers is more and more serious. At the same time, there are a lot of reports saying that migrant workers having the high wage. It is contradictory considered with the theory of labor supply and labor price. So it is very important to assess the level of migrant worker’s wage, which can be a basis for policy formulation. Based on the theory of compensating wage, this paper assess the wage of migrant workers, considered with monetary wages and non-monetary conditions.According to the human capital theory and the theory of compensating wage differential theory, We compare the migrant worker’s salary with urban worker’s salary. Analysis will be separate into three parts. Firstly, migrant workers and urban workers have different human capital. So their wage will be different. Secondly, compared with the urban workers, the migrant workers having the same production capacity are almost doing the bad jobs. According to the theory of compensating wage differentials, these migrant workers should get compensating wage because of those bad working conditions. Thirdly, even if migrant workers do the same job as urban workers, they also need to pay more cost. It is because that if they choose to work outside, they have to leave their family members and live alone. They also should get some compensating wage for this extra cost.So we use the data from urban household survey of Zhejiang province and migrant workers monitoring of Zhejiang province to assess the salary of migrant workers. Firstly, using the least squares estimation method, we assess the wage difference between the two types of labor, considered with the difference of their production capacity. Secondly, using Brown wage decomposition to measure the position distribution difference and inexplicable wage difference between the two types of labor. Thirdly, using the todaro model, assess the migrant workers’compensating wage because of the opportunity cost. Finally, we compare the reasonable wage gap with actual wage gap between the two types of labor. Finally, we will compare the reasonable wage difference, which considering the human capital difference, compensating wage for occupation isolation, compensating wage for migrant workers’opportunity cost, with the factual wage gap between urban workers and migrant workers. Based on the empirical results, migrant worker’s wage is lower than urban workers. From2009to2012, the reasonable wage gap between the urban workers and the migrant workers is-1.34yuan,-1.62yuan,-0.83yuan,-0.46yuan. But the actual wage gap is6.93yuan,6.25yuan,5.24yuan,4.73yuan. So the migrant workers’wage is very low.

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CLC: > Economic > Agricultural economy > China 's agricultural economy > Construction and development of agricultural economy > Agricultural income and distribution
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