Discrimination, Income Determination and Inequality – The case of Shenzhen

This paper estimates the income effect of non productivity related discriminatory factors, compared to productivity related returns on human capital in Shenzhen. The design of the Shenzhen Household Survey 2005 that was employed enables us to include a large set of discriminating factors in a Mincer Becker type of income model. Further, we are able to take a unique look at the migrant population in this outstanding urban centre. Our results show that the human capital approach holds. We also find strong evidence of a significant influence of social norms and policies, particularly relevant in a developing and transition economy, even in such an exceptional city.