The migrant workers have played an important role in the economic development in urban China during the last 30 years. However, they are usually paid less, doing low-end jobs, and not entitled of working benefits. The migrant workers’ inequality problem has led to many labor disputes and social conflicts, raising the attention form Chinese government. Previous studies have provided empirical evidence to reveal discrimination against migrant workers in urban China. However, the research topics usually focus on an objective comparison of the career achievement between migrant workers and city workers. Very few studies touch the issue about the migrant workers’ perceptions of employment discrimination. The aim of this study seeks to investigate the “two-tier” labor market in urban China and provide an empirical study to analyze migrant workers’ subjective perceptual measures of wage discrimination. A probit model is employed to estimate the micro-level data drawn from the Chinese Household Income Project (CHIP) in 2002. The empirical results show that the migrant worker’s education level, hukou status, working location, and perception of the standard of living have significant impacts on his subjective perceptual measure of wage discrimination. Holding all other things constant, migrant workers with lower education level are more likely to feel that they encounter wage discrimination. Besides, migrant workers with local rural hukou are more likely to think that they are paid the same wage as the city workers, compared to their counterpart without local hukou. Most importantly, when the migrant worker believes that his current living status belongs to the highest 50% group of the city, it is more likely for him to believe that he and the city workers enjoy equal pay for equal work. The findings suggest that, for the purpose of social stability, it would be better for the Chinese government to encourage the migrant workers to work in a city near their hometown. Additionally, while raising wage level for migrant workers is an important issue for policy makers, improving migrant workers’ perceptual measures of their standard of living would be another way to ease the conflicts involving migrant workers. Key word: migrant workers, China, two-tier labor market, subjective perceptual measures

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