Establishing a Sustainable Labor Market in Developing Countries: A Perspective of Generational Differences in Household Wage

The importance of a sustainable labor market is a critical and fundamental point for many developing countries, where global competitiveness is based on cheap labor. The aim of this empirical–analytical study, framed in China in the research context, is to approach this hot topic from the lens of household wage differences between generations. Using cross-sectional data, consisting of the China Dynamic Migrant Survey and Oaxaca-Blinder decomposition methods and quantiles, to analyze the data results confirmed the differences in wages between two generations of peasant and urban workers. Moreover, a distinctive tapering in the pay gap occurred among the new generation. Fundamentally, a big gap exists in the rate of return on education between urban and rural labor. According to the results of quantile decomposition, the old generation of peasant and urban workers demonstrate anti-discriminatory phenomena at very low and very high scores.