Abstract
The article analyzed the income differences between flexibly and nonflexibly employed persons based on the 2018 China Mobile Population Dynamics Monitoring Data, using OLS methods, propensity score matching (PSM), and Oaxaca-Blinder decomposition. The results show that the income of flexibly employed persons is 11.9%–23.6% higher than that of nonflexibly employed persons, with differences in individual endowment characteristics explaining 53.9% of the income difference and differences in coefficients of nonmarket factors explaining 45.7% of the income difference. The degree of income difference between the two groups in different industries varies; except for the primary industry, the secondary and tertiary industries all show higher income for flexibly employed persons than for nonflexibly employed persons. The difference in income between the two groups was as high as 25% or more in the sectors of “rental and business services,” “education,” and “culture, sports, and entertainment.” The high ratio of employers and self-employed workers in flexible employment and the fact that the average number of hours worked per week is 12.6 hours higher for flexible workers than for nonflexible workers are important factors contributing to the difference in earnings between these two groups. Clarifying the extent of the current income disparity between flexible and nonflexible employment groups and its sources, and formulating and adjusting relevant policies and measures in a timely manner are conducive to creating a fair and equitable labour market environment and promoting the healthy development of flexible employment under the new circumstances.
Highlights
In July 2020, the General Office of the State Council issued the Opinions of the General Office of the State Council on Supporting Flexible Employment through Multiple Channels, which pointed out that “flexible and diversified employment methods such as self-employment, part-time employment, and new employment forms are important ways for workers to increase their income and play an important role in widening new employment channels and fostering new momentum for development.” It is requested that “flexible employment is supported as an important measure to stabilize employment and preserve employment for the population,” and that multiple measures be taken to promote flexible employment [1]
Wang (2017) [23] conducted an empirical study on the wage difference between formal and informal employment in urban China from 1989 to 2011, and the results showed that the wage gap between the two types of employment groups is asymmetric and the difference in characteristics explained by individual endowments is increasing, while the difference in coefficients explained by nonmarket factors has been declining, reflecting that China’s labour market has generally become more fair and better, and the wage determination mechanism has become more market-oriented
E steps in using the propensity score matching method are as follows: (1) select the control variable X, including relevant variables affecting Y0, Y1, and D where possible; (2) estimate the propensity score, generally using the logit regression to estimate the probability of each practitioner choosing flexible or nonflexible employment; (3) conduct propensity score matching if the propensity score is estimated more accurately, so that X is distributed more evenly in the matched treatment and control groups after matching; and (4) calculate the ATT based on the matched sample (Bryson and Purdon, 2002 [25]; Caliendo and Sabine, 2005 [26])
Summary
In July 2020, the General Office of the State Council issued the Opinions of the General Office of the State Council on Supporting Flexible Employment through Multiple Channels, which pointed out that “flexible and diversified employment methods such as self-employment, part-time employment, and new employment forms are important ways for workers to increase their income and play an important role in widening new employment channels and fostering new momentum for development.” It is requested that “flexible employment is supported as an important measure to stabilize employment and preserve employment for the population,” and that multiple measures be taken to promote flexible employment [1]. Flexible employment has flourished in the labour market because it has lower entry barriers and flexible entry and exit mechanisms compared to nonflexible employment, and can adapt to a wider range of economic structures and rapidly changing economic situations, allowing enterprises to save costs and employees to have freer working arrangements or higher incomes (Liu, 2009) [4]. E sudden outbreak of COVID-19 combined with China’s downward pressure on economic operation has a considerable impact on the labour market, the new flexible employment relying on the Internet platform has played an important role in promoting and stabilizing employment, the structure of flexible employment has gradually changed from the mainly low-end manufacturing and service industries to the high-end in the past, and the employment situation of employees has improved to some extent. In the current context of deeper segmentation of the labour market and the persistence of market discrimination (Zhang et al, 2018 [7]; Zhang, 2019 [8]), the issue of income differentials deserves continued in-depth study
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