The 24th Xi Xian Forum on Income Distribution and Public Finance, co-organised by IIDPF and the Institute of Public Finance and Taxation, was successfully held on 3 March 2022 in Conference Room 119, Wenqin Building. Dr. Tang Rongsheng, Assistant Professor at the Institute for Advanced Research, Shanghai University of Finance and Economics, was invited to deliver a keynote speech on "Within-Job Wage Inequality: Performance Pay and Skill Match" as the guest speaker of the 24th Xi Xian Forum. The forum was chaired by Professor Lu Yuanping, Executive Deputy Director of the IIDPF. The forum was attended by more than 20 students and teachers, including Professor Sun Qunli, Deputy Director of IIDPF, Professor Li Rui from the School of Public Administration, Associate Professor Huang Hongwei from the School of Public Administration, Ma Gaogang from the University Research Department, and all IIDPF researchers, through online and offline means.
The findings of Dr Tang show that about 80% of the widening residual wage inequality in recent decades has been within jobs, and is more pronounced among those with higher education. To explore the underlying drivers of this phenomenon, Dr Tang used CES data to construct a model to investigate this phenomenon. The model has been calibrated to the US economy in 1990 and 2000 to further quantify the role played by these factors. A series of empirical analyses found that match quality and job classification were particularly important in jobs with rising average wages and expansive employment. While the incidence of pay for performance did not contribute significantly to the overall outcome, it was more pronounced in the trade sector and clerical occupations, while overall productivity was irrelevant. Emphasising the importance of intra-work, it proposes a mechanism to match performance pay with skills, contributing a theoretical basis to explain residual pay inequality. Dr Tang's theoretical research has implications for China in the study of the incidence of performance pay and the different performance pay and hence wage inequality resulting from SOE reform.
The presentation by Dr Tang Rongsheng aroused the interest and resonance of the students and faculty in the audience, who actively exchanged and discussed in depth about the model and variable settings.
