What are the main reasons for the large pay gap in the industry?

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The explanations for industry wage income differences in relevant foreign literature can be summarized into two factors: labor market competitive factors (including human capital Compensation factors, negative labor effect factors, etc.) and non-competitive factors (including efficiency wage system, trade union factors, institutional factors, etc.). Most domestic literature attributes this explanation to non-competitive factors, focusing on analyzing the impact of institutional factors on industry wage gaps. It is argued that monopoly (ownership monopoly) is the main cause of industry wage differences.

Research reveals that the influencing factors of the industry wage gap are the economic growth rate (GDP) and the degree of industry monopoly (the proportion of state-owned economic components). Jin Yuguo (2004) used the Granger causality test method to verify the monopoly hypothesis he proposed, and concluded that the industry wage level depends on the relative monopoly degree of the industry (the proportion of state-owned economic components). Chen Yi's (2005) research also confirmed that if the proportion of state-owned economic components in enterprises is different, there will be great differences in wage levels. He conducted an in-depth analysis of the impact of enterprise ownership on wage differences and concluded that there is a large wage gap between state-owned enterprises and non-state-owned enterprises in my country. This wage gap comes from the differential effect of ownership and the differential effect of working hours, rather than Differences in personal characteristics. The wage difference between central and local state-owned enterprises and urban collective enterprises is the result of the joint effect of ownership effects and different worker characteristics. The wage difference between central state-owned enterprises and local state-owned enterprises is entirely due to the ownership effect. The wage difference between local state-owned enterprises, urban collective enterprises and foreign-invested enterprises is mainly caused by the pure ownership effect.

As for the impact of other institutional factors, such as labor unions and wage distribution systems on wage gaps, there is less research by Chinese scholars and more research by foreign scholars. Australian scholar Waddoups, C. Jeffrey (2005) conducted a study on the impact of trade unions in their country. Based on the fact that the number of unions in Australia has gradually decreased since the 1990s, the author analyzed the data since 1993 and found that the impact of unions on wages is weakening. The wage difference between union and non-union enterprises is very small, and it is no longer consistent with the industry. related to the degree of unionization. Garino, Gaiaa, and Martin (2000) studied the impact of the efficiency wage system on wage differences. They combined the efficiency wage system with union bargaining theory to establish a wage determination model. The study found that when the efficiency wage effect exists, the increase in monopoly power in the commodity market will have a stronger impact on wages and widen the wage gap.

As for the impact of competitive factors on industry wage gaps, research by Chinese scholars generally shows that human capital is not the main cause of industry wage gaps. For example, Xu Linqing (2004) analyzed the impact of education on industry wages and found that industry wage differences cannot be explained by human capital characteristics, and gender employment tendencies cannot reveal industry wage differences. Wang Meiyan's research shows that the impact of education on industry wages is different in each province. However, research by Zhong Chunping (2004) shows that the degree of technological innovation in the industry is one of the main reasons for the wage gap in the industry. He applied Schumpeter's innovation theory to analyze the causes of the industry wage gap from the perspective of changes in technological innovation. He concluded that the number of patent applications by residents and the industry wage gap have a co-directional relationship.