Marginal effects of public employment on unconditional distribution of wage income in China

This paper examines the marginal effects of an employment expansion in China’s public sector on the unconditional distribution of “wage income” using the unconditional quantile estimation suggested by Firpo et al. (2009). Empirical data from the China Health and Nutrition Survey is split into three...

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Bibliographic Details
Published in:The North American journal of economics and finance 2020-11, Vol.54, p.101002, Article 101002
Main Authors: Su, Zhi-fang, Ma, Xiao-xiang, Xiao, Wei, Chen, Mei-Yuan
Format: Article
Language:English
Subjects:
Employment expansion
Income inequality
Marginal effects
Unconditional quantile estimation
Wage income
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Summary:This paper examines the marginal effects of an employment expansion in China’s public sector on the unconditional distribution of “wage income” using the unconditional quantile estimation suggested by Firpo et al. (2009). Empirical data from the China Health and Nutrition Survey is split into three sub-samples to eliminate the effects of the Asian financial crisis in 1997 and the subprime financial crisis in 2008 on our empirical results. To explore the marginal effects, the empirical unconditional distributions of wage income “before” and “after” an expansion of the public employment have been graphed and compared. It has been found that an expansion of China’s public employment reduces the dispersion of wage income and hence alleviates income inequality in China. Besides, an expansion of public employment makes the symmetrical unconditional distribution of wage income become leftward skewed. Given these findings, an expansion of the public employment caused by the strategy of “guojin mintui” could mitigate China’s income inequality.
ISSN:1062-9408
1879-0860
DOI:10.1016/j.najef.2019.101002