The phenomenon of " height premium” that taller adults’ average wages are higher is common. Many studies have found that height raises earnings through two possible paths: the differences in human capital among different persons or the discrimination against height in the labor market. However, the research on the " height premium” phenomenon in China’s labor market is insufficient. On the one hand, there is no literature giving a clear economic explanation of the " height premium” phenomenon in the labor market of China. On the other hand, China’s labor market has its own particularity that the market-oriented reform has played an important impact in China’s labor market. And there exists great heterogeneity in the degree of marketization among different regions, but there is no literature explicitly exploring the impact of marketization on the phenomenon of height premium. Therefore, to study the problem of " height premium” in the labor market of China, explore the mechanism of this phenomenon, and analyze the effect of marketization on the height premium is a useful supplement to the literature. In this paper, we empirically analyze whether there is " height premium” in the labor market of China and explore the mechanism by using the data of 25 to 55 years old urban samples in China Family Panel Studies （CFPS2014）. Furthermore, we analyze the role of marketization in eliminating the discrimination against height by using the data of CFPS2014 and the marketization index data of China. Two additional unique contributions are a byproduct of this study. First, using national representative sample, we analyze the channels and present an explanation of this phenomenon. Second, we analyze the regional heterogeneity of the " height premium” and explore the effects of marketization on eliminating the discrimination against height. Firstly, this paper examines whether there exists the phenomenon of " height premium” in China’s labor market. The results of whole sample and subsample by gender all show that height has a significant positive impact on income, that is, the " height premium” phenomenon exists in China’s labor market. Specifically, the results suggest that the increase in adult height by one centimeter is positively associated with the increase in hourly wage by nearly 1 per cent for both males and females, and this result is robust. Moreover, the advantages of height can help individuals gain a white-collar job and enter a career category with higher professional prestige. Secondly, in this paper, we analyze why there exists " height premium” phenomenon in China’s labor market. Then we use an " intermediary role” model to analyze the impact of the mechanism and find that height premium is most likely to come from the employer discrimination in labor market, rather than consumer discrimination or the differences in individual education level, cognitive skills and non-cognitive skills. Finally, based on the analysis of the existence of regional heterogeneity of the " height premium” phenomenon, we analyze the effect by enhancing the regional marketization degree on eliminating the discrimination against height in labor market. The regression results show that " height premium” phenomenon has obvious regional heterogeneity, that is, the effect is more significant in the less developed areas, and the promotion of the degree of marketization can significantly reduce labor market discrimination against appearance. Therefore, the standardization of China’s labor market, equal pay for equal work and equality of employment opportunities, and the enhancement of the investment in nutrition and health environment during the critical period of growth may have positive significance to eliminate the discriminatory behavior against height in the labor market in China.
Can Marketization Eliminate Labor Market Discrimination? The Evidence from Height Premium
Journal of Finance and Economics Vol. 44, Issue 05, pp. 140 - 152 (2018) DOI:10.16538/j.cnki.jfe.2018.05.010
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Cite this article
Zhang Xiaoyun, Xin Binghai, Du Liqun. Can Marketization Eliminate Labor Market Discrimination? The Evidence from Height Premium[J]. Journal of Finance and Economics, 2018, 44(5): 140-152.
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