Privatization and enterprise wage structures during transition: Evidence from rural industry in china

Wage structures in transition economies usually diverge significantly from their centrally–planned predecessors. Using a matched sample of employees and enterprises, we examine the effects of privatization on wage structures in rural industry in two provinces of China. We find that privatization was associated with increased wage and earnings inequality. We report increased returns to education, increased returns to experience for mid–age workers, and increases in gender wage discrimination. We find these aspects of wage structures are similar in different types of private ownership emerging from the reform process. JEL classification: P31, P23, P26 and J31.