Who suffers from COVID-19 shock? Labour market risk and wage inequality in China

ABSTRACT Through an online survey from 2020, this study aims to investigate how labour market status and occupational factors shape the risk of wage drops resultant of the COVID-19 outbreak. Quantitative evidence shows the risk is amplified for lower-educated labourers working in administrative positions, and affiliated to the traditional service sector and foreign invested enterprises (FIE) and they are more likely to experience earning reduction. COVID-19 in China witnesses a significantly downward trend of labours` wage and general wage inequality has slightly eased. This study calls for policy shift in direct financial subsidies to workers to mitigate labours’ risk.