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A major determinant of the primary distribution of national income, wages will have tremendous impacts on both social equity and economic efficiency in China. Wages in China: An Economic Analysis presents the latest research results on the transformation of China’s wages formation mechanism since the adoption of the Reform and Opening Up policy. This 3-volume series looks at the impact from the institutional evolution of the wage system, social networks, and geographical factors on the determination of wages. After reviewing the history of China’s wage policies and systematic transformation, the author examines the collective negotiation system as an example of institutional changes to explore the impacts on employees’ wages, and does an empirical study on the shrinkage in labor’s share of national income by using industrial and provincial data. Based on the discussion of local policy-making decisions under fiscal federalism in China, the author also analyzes the regional wage differences with economic geographical and regional policy variances. The perspective of inter-industrial wage spillover is also followed to explain the wage differences and convergence paradox.

Wages in China