Related Experiment Video
Updated: Aug 26, 2025

Author Spotlight: Simulation and Analysis of the Temperature Rise of Ring Main Unit Equipment
Published on: July 5, 2024
The interindustry wage differentials by sector in China: What is the role of union density?
1Department of Economics and Business, Central European University, Vienna, Austria.
Abstract:
Although how union density affects interindustry wage differentials has long been discussed, there is a paucity of empirical research relevant to China. The trade-union system in China has been criticized for a long time because the Chinese Communist Party can influence union density and indirectly affect interindustry wage differentials through non-market mechanisms, such as administrative monopolies. This study explores the impact of union density on interindustry wage differentials in the context of administrative monopolies. The research takes a two-stage estimation approach after scrupulously integrating and conforming more than 40,000 individual data from the Urban Household Survey and various yearbooks from years 2004, 2008, and 2013. In the first stage, the individual wages are regressed with industry-sector dummies to obtain the wage-differential coefficients. Furthermore, union density is considered as a core variable to create regressions to the interindustry wage differential coefficients obtained in the first stage using administrative monopolies and labor safeguards as instrumental variables. It is found that although the union density was expected to increase wage differentials in industries, its influence diminished in 3 years under study. Administrative monopolies can indirectly affect wage differentials through union density. The support to grassroots unions in non-administrative monopolies industries and the opening up of industry to the private sector will help to overcome this dilemma.
Related Concept Videos
Compensation Mechanisms
Respiratory Compensation
This mechanism addresses metabolic-induced pH imbalances by adjusting breathing rates. Respiratory compensation begins within minutes of detecting a pH...
Measures of Central Tendency
Bending of Members Made of Several Materials
Hooke's Law determines stress in each material, stating that stress is proportional to strain but varies due to each...
One-Way ANOVA: Equal Sample Sizes
Different sample means can result in different values for the variance estimate: variance between samples. This is because the variance between samples is calculated as the product of the sample size and the variance between the...
Chi-square Distribution

