A Study on Wage Premium of Provincial Capital Cities in China——A Space Econometric Analysis Based on Quantile Regression [J]
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This paper examines the effects of wage premium between capital cities of provinces and non-provincial-capital cities in China.Using a sample of workers in urban areas from China Health and Nutrition Survey of 2000,2004 and 2006,it points out that the wage earned by a worker in capital cities of provinces is 14 percent more than the one earned by a worker with similar qualities in non-provincial-capital cities by OLS regression model.Using Mundlak-Chamberlain's random-effect model,the paper suggests that controlling the living costs in cities can reduce a half of this premium at least,so this wage premium is partly due to the higher return to high-level human capital.In accordance with the space equilibrium theory suggested by Urban Economics,the residual wage premium of provincial capital cities disappears by bringing commuting time into the model,which confirms the existence of agglomeration economic effects in provincial capital cities.Considering the increasing income gap in China,the paper brings wage quantiles into our models to make a further study.Obviously,workers in higher wage areas benefit more from the advantages of capital cities of provinces.These results highlight the importance of studying urban labor markets at micro level.
JOUR
Huang, Feng
Wu, Chun-jie
2008
Journal of Finance and Economics
9
1697