Generalized Mutual Information Index and Its Application to Sectoral Segregation in China's Labor Market

Abstract

Understanding the segregation in labor market is conducive to discussing a series of related topics. Built on the framework developed by Theil and Finizza (1971) and Blau and Jusenius (1976), a generalized mutual information index is constructed in this paper. By utilizing this kind of mutual information index, the effect of multidimensional segregation as well as conditional segregation can be analyzed. In addition, we present its two ways of decomposition. One of them is used to decompose the happened segregation to betweenness effect and withinness effect, and the other can be used conveniently to extract the interaction terms. We also applied the newly developed index to study the occupational and ethical sector segregation conditional on hukou and gender in China’s labor market by using a micro-level survey data. Empirical results reveal that the sectoral segregation among Han ethnicity and the workers with a college and above degree are larger comparing to their counterparts, either controlling the effect of gender or hukou. Also the negative interactive terms indicate a "synergy" in the information provided by education and ethnicity to occupational sector.