Regular Article

Comparative Economic Studies

, Volume 55, Issue 1, pp 121-143

First online:

The Supply and Demand Factors Behind the Relative Earnings Increases in Urban China at the Turn of the 21st Century

  • Hang GaoAffiliated withDepartment of Economics, University of Alberta
  • , Joseph MarchandAffiliated withDepartment of Economics, University of Alberta
  • , Tao SongAffiliated withDepartment of Economics, University of Alberta

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All of the demographic and skill groups in China's urban labor market received increases in their real earnings from the mid-1990s to the early 2000s. This paper analyzes these relative earnings increases with respect to the relative supply and demand changes for each of these imperfectly substitutable labor inputs. The relative movements of both supply and demand were consistent with the relative earnings increases across experience groups, but only the relative demand movements were consistent across education groups, and neither of the movements could help explain the gender differences.


China earnings labor demand labor supply transitional economies


J20 P23 P31