Since 1990s, the privatization of ownership structures has greatly stimulated the growth of informal employment, which has produced a profound effect on the urban labor market. Although informal employees are usually faced with low wages, terrible work conditions and scarce social securities, there is no evidence that they are crowded into the low-grade market. The informal sector is not equal to the low-grade market and the labor market segmentation is also not deepened with the increase of the informal employment.