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Labor Market Outcomes and Reforms in China
Abstract
Over the past few decades of economic reform, China's labor markets have been transformed to an increasingly market-driven system. China has two segregated economies: the rural and urban. Understanding the shifting nature of this divide is probably the key to understanding the most important labc market reform issues of the last decades and the decades ahead. From 1949, the Chinese economy allowed virtually no labor mobility between the rural a urban sectors. Rural-urban segregation was enforced by a household registration system called "hukou.' Individuals bom in rural areas receive "agriculture hukou" while those bom in cities are designated as " nonagricultural hukou." In the countryside, employment and income were linked to the commune-bas production system. Collectively owned communes provided very basic coverage for health, education, and pensions. In cities, state-assigned life-time employment, centrally determined wages, and a cradle-to-grave social welfare system were implemented. In the late 1970s, China's economic reforms be but the timing and pattern of the changes were quite different across rural and urban labor markets. This paper focuses on employment and wages in the labor markets, the interaction between the urban and rural labor markets through migration, and future labor market challenges. Despite the remarkable changes that have occurred, inherited institutional impediments still play an important role in the allocation of labor; the hukou system remains in place, 72 percent of China's population is still identified as rural hukou holders. China must continue to ease its restrictions on rural-urban migration, and must policies to close the widening rural-urban gap in education, or it risks suffering both a shortage of workers in the growing urban areas and a deepening urban-rural economic divide.
... While the rate of decline was minimal in the first few years, the 2% drop from 2019 to 2020 is especially concerning. Combined with the declining birth rate and the shrinking size of the youth population, this flags a steeper fall of the 198219901992199420002020 Change in % of PopulaƟon Aged between 15-64 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Total Employed (10,000) % of employed among working age populaƟon working population. The number of employed people is also down from the peak of 763.49 million in 2014 to 750.64 million in 2020. ...
... One of the main consequences of the state sector reform was the privatisation or closure of SOEs, and the subsequent loss of formal jobs with guaranteed lifetime social protection, or so-called "iron rice bowl". Older workers were hit hard in this reform which led to a decline in the employment of urban older workers (Meng 2012). Some urban older workers withdrew completely from the labour force due to the "discouraged worker effect" (Meng 2012;Giles et al. 2006), and others re-entered the labour market through informal employment. ...
... Older workers were hit hard in this reform which led to a decline in the employment of urban older workers (Meng 2012). Some urban older workers withdrew completely from the labour force due to the "discouraged worker effect" (Meng 2012;Giles et al. 2006), and others re-entered the labour market through informal employment. The major source of informal workers is migrant workers from rural areas. ...
A one-stop shop for information on the topic of labour market implications of ageing population in China
Labour market focus to provide specialised information
Multi-discipline lens to provide different perspectives of a topic of shared interest
... While the sheer number of migrants is unprecedented, it is not sufficient to offset current labor shortages in urban areas. The supply of labor is limited by policies that treat migrants as 'guest workers' in cities, which leads to shorter migration spells than if migrants viewed their moves to be permanent (Meng, 2012). Recognizing that continued increases in the supply of labor to urban areas requires facilitating longer-term migration, China's government has initiated reforms aiming to increase migrant participation in urban employee health insurance and pension programs. ...
... What explains the slow progress in expanding migrant participation in urban social insurance programs? Earlier research has highlighted the following contributing factors: poor incentives for local governments to enforce laws, the possibility that employers try to avoid making contributions to employee social insurance accounts, and the lack of enthusiasm among migrants for participation, which may be due to the fragmented nature of the system and consequent lack of geographic portability of enterprise contributions (Meng and Manning, 2010;Meng, 2012;Giles et al., 2013;Gallagher et al., 2014). Posessing little or no prior experience with urban employee social insurance schemes, China's migrants may lack full understanding of the potential benefits from enrollment and participation in these programs. ...
... Despite their significant contributions, migrants are treated as "guest workers" in cities under China's household registration (hukou) system: the social insurance programs and services benefitting urban locals are either not available to migrants, or are unsubsidized and much more expensive. Lack of access to social insurance in cities leads migrants to return to rural areas when sick or unemployed, to raise their families or to care for elderly family members (see, for example, Giles and Mu, 2007;Meng, 2012). Consequently, hukou restrictions shorten the duration of migrant stays in cities (which currently average to 8-9 years), limits the potential stock of migrant labor supply in cities as older migrants return home, and thus exacerbates a labor shortage that contributes to rising labor costs. ...
... Had there been no discriminatory policy hindering their ability to live in cities with their family they would probably have remained there and built up human capital by accumulating labour market experience. Hence, not only did the restrictions on migration lead directly to the labour shortages, but, if the policy were to change, the current group of migrants in cities would not need to return home as they age and this reduced turnover would significantly increase city labour supplies and the average skill level of migrant workers (Meng 2012). ...
... Recently, I visited a village in Hubei province during the planting season (a relatively busy season in agriculture) and witnessed a large proportion of individuals spending much of their day sitting around mahjong tables, and was told that such activity is common among adults in the region and beyond. If institutional restrictions and discrimination against migrant workers in the cities can be eliminated many of these idle rural workers who have stayed in rural areas for family reasons, such as looking after children or the elderly, would be able to migrate and stay in the urban labour market and improve labour supply conditions in cities (see Meng 2012). ...
... The higher turnover rate reduces the stock of migrant workers in the cities. This is probably the primary cause of China's current labour supply 'shortage' (see Meng 2012). ...
... Vocational education has attracted much attention in recent decades, especially after the massification of higher education in developed countries and recently in some developing countries including China (Meng 2012;Mok and Marginson 2021). In this section, we first provide contextual explanation of the current education system in China and its potential implications on the changes of returns to vocational education. ...
... We see that the proportion of university graduates increased slowly before 2000 and surged after that. The dramatic change is due to the higher education expansion in 1999 (Meng 2012;Meng et al. 2013;Zhong 2011). This variable is exogenous in that any individual decision cannot affect the proportions over the years. ...
In this paper, we use the Chinese General Social Survey data (2010–2017) to analyze the dynamics of returns to different education qualifications. We find increasing returns for all types of education, with returns to vocational and academic education increasing roughly at the same speed. We additionally compare the returns to vocational education with returns to academic education. Compared to those who only complete compulsory education, upper secondary graduates earn about 20% more, vocational college graduates earn 50%, and academic university graduates earn 75% more. At tertiary level, academic education pays better than vocational education, although the difference shrinks over the years. At upper secondary level, the evidence is indeterminate, depending on different econometric techniques (i.e., OLS, IV, Lewbel method, or PSM). These findings add to the limited quantitative evidence on returns to vocational education. The dynamics emerged from the findings echo the discussion on labor market mismatch and overeducation in China, which has important policy implications.
... Testing the impact of household responsibilities on female migrant workers' commutes, we acquired more detailed information than previous studies: migration patterns (solo, couple, and family migration), hours of domestic work, information about school pick-up and dropoff, and whether three generations live together. Existing studies have only considered whether workers were married and had children and have regarded family makeup only in terms of age (Turner and Niemeier 1997;Crane 2007;Lersch and Kleiner 2018;Skora et al. 2020;Chidambaram and Scheiner 2021;Kwon and Akar 2022;Lee et al. 2022;Echeverria et al. 2023;Fagnani 1987;Hu 2020;Fan 2017;Kwon 1999;Meng 2012). Simultaneously, we examined strengthening/weakening effects of factors such as urban structure, land use mix, and housing supply on gender differences in migrant workers' commuting. ...
... In large urban environments, paid work is often inflexible in terms of location and hours and requires the availability of non-maternal childcare. Contrasting local urban families, female rural-to-urban migrant workers cannot take advantage of family resources and urban public childcare services (Connelly et al. 2018;Meng 2012). Therefore, their labor market participation rate is lower than that of local urban women (Maurer-Fazio et l. ...
There are ongoing debates on whether household responsibilities limit women’s commuting behaviors. At present, no relevant study exists on rural-to-urban migrant women, and few investigations distinguish between employees and the self-employed. This empirical study focuses on rural-to-urban migrant women in China, examining the impact of household responsibilities on commuting. Using regression analysis on data from 2204 questionnaires distributed in Nanjing in 2021, results reveal that contrary to prior findings, rural-to-urban migrant female employees have longer average commuting times than their male counterparts. This is related to gendered occupational segregation and housing availability. No evidence suggests family migration or childcare affects commuting times for female employees. Among self-employed rural-to-urban migrant workers, gender has no significant effect on average commuting times. Family migration increases commute time for self-employed women but not for men. The study reveals longer commutes for female migrant employees and how gendered occupational segregation, housing, and household responsibilities impact gender commuting dynamics differently in employed and self-employed migrant workers. The study highlights the importance of the intersection of gender and class and the distinction between employees and the self-employed in urban studies.
... In 1958 China implemented the hukou system, a unique household registration system. The system was created with the goal of regulating migration and allocating resources efficiently for the entire country (Meng, 2012, Xiang, 2015. Two dimensions of constraints are imposed by the hukou system: type and location. ...
... This phenomenon has drawn attention from scholars in various academic fields, including economics (e.g.,Afridi, Li & Ren, 2015, Li, Loyalka, Rozelle & Wu, 2017, Meng, 2012, Tombe & Zhu, 2019, sociology (e.g.,Bian, 2002, Wang & Schwartz, 2018, Wu, 2019, Wu & Treiman, 2004, political science (e.g.,Vortherms, 2019Vortherms, 2021, and public health (e.g.,Gong et al., 2012). ...
Social status is a key determinant of marital sorting patterns. This paper studies the role of the hukou system — a household registration system in mainland China that categorizes individuals into rural and urban groups — in shaping marital sorting patterns. Specifically, I evaluate a policy that granted men the same rights to transfer their hukou status to children as women. The policy significantly increased hukou intermarriages, particularly between rural women and urban men. By estimating a two-sided directed search and matching model, I find that the policy distorted the marriage market by increasing search frictions to a greater extent for rural men than for urban men. Highly educated rural men would have benefited the most if this policy had not been implemented, indicating that they suffered the most welfare loss, at least in terms of marriage outcomes. The findings underscore the importance of understanding the role of social status in shaping marriage markets and the impact of status-related policy interventions on welfare outcomes.
... Therefore, the effect of such polices may have a lower bound or even a U-shape effect with respect to the reduction of the wage gap. Additionally, since institutional discrimination crowds migrants into low-end jobs regardless of their educational attainment (Cai, 2007;Meng, 2012), migrant workers may choose to work rather than invest in human capital. Hence, the combined effects of pre-market discrimination, labor market segregation and in-market discrimination against migrant workers have contributed to the continued wage gap between urban and migrant workers. ...
... Hence, the combined effects of pre-market discrimination, labor market segregation and in-market discrimination against migrant workers have contributed to the continued wage gap between urban and migrant workers. China, the most populous country, is expected to encounter labor shortages (Cai, 2010;Knight et al., 2011;Meng, 2012). Discrimination against migrant workers may aggravate rather than alleviate the labor shortage since it harms the efficiency of the labor market. ...
Since the end of the 1980s, the number of migrants working in the urban labor market has increased dramatically. However, migrant workers are treated differently from urban workers. In this paper we examine the labor market discrimination against rural migrants from the point of view of wage differentials using CHIP-2007 data. We apply Jann pooled method to deal with index number problem and use Heckman two step model to correct selection problem when decomposing the wage gap. The decomposition results show that a significant difference in wage gains persists between the two groups as late as 2007. In 2007 migrants only earned 49% of urban workers' income and 17% of the wage gap cannot be explained by observed factors. In detail, differences in educational attainment, work experience and distribution across industry, occupation, and ownership of enterprises account for most of the explained wage gap.
... Under the current social circumstances in China, it is especially insightful to map out the distribution of work trajectories and investigate the effect of work trajectories on status attainment. First, in contrast to job immobility patterns before the market transition (Walder 1986), China's labor market during the transition exhibits diverse economic forms, a complex division of labor, multiple employment statuses (Meng 2012), and significant increases in intragenerational job mobility (Zhou 2019). For most individuals, socioeconomic status and social mobility are achieved through highly heterogeneous job mobility patterns in the labor market. ...
... Since the reform, the private sector has appeared and gradually expanded to occupy the majority of the market. State-owned, privately owned, and foreign-invested sectors have diversified the market and created more employment opportunities for individuals (Meng 2012). People can either be employed in different market sectors or become private entrepreneurs or self-employed. ...
Applying sequence analysis methods to work trajectories recorded in the 2012 China Labor Force Dynamics Survey, this study examines the types of work trajectories in China’s urban labor market in three dimensions: employment status, organizational type, and work position. The findings suggest that along with the market transition, China’s urban labor market is experiencing diverse and complex job mobility patterns. This study identifies four types of work trajectories: the merit-based work trajectory, the blue-collar’s work trajectory in the private sector, the blue-collar’s work trajectory in state-owned enterprises, and the self-employed trajectory. These four typical work trajectories have significantly different influences on individuals’ attainment of socioeconomic status and elite status. This study sheds light on the microprocesses in status attainment by examining the role of work trajectories from a longitudinal perspective.
... The wealth created by labor among labor, capital, and natural forces is far less than the wealth created by capital. Compared with developed countries, labor in China is cheaper, and income distribution is more uneven [7]. Investment industries such as real estate, mining, finance, etc., which account for relatively large capital, generally have higher incomes, while industries with a large labor share, such as agriculture and handicrafts, have lower incomes [7]. ...
... Compared with developed countries, labor in China is cheaper, and income distribution is more uneven [7]. Investment industries such as real estate, mining, finance, etc., which account for relatively large capital, generally have higher incomes, while industries with a large labor share, such as agriculture and handicrafts, have lower incomes [7]. As a result, income distribution problems between industries have been exacerbated-the gap between rich and poor. ...
... (户口) (Meng, 2012). Hukou has created barriers between rural and urban areas, because social welfare such as medical care and children's education is based on it (Wang et al., 2021). ...
... Hukou has created barriers between rural and urban areas, because social welfare such as medical care and children's education is based on it (Wang et al., 2021). In the late 1990s, economic growth in the Chinese cities triggered the large demands of unskilled labour, especially after China officially attended the World Trade Organization (WTO) in 2001, the export-led economy generated the demands sharply to relax the domestic migration restriction (Meng, 2012). Beijing, as one of the important metropolises in China, attracted millions of migrants due to the relatively higher salary. ...
This study explores the discursive construction of Chinese women in the Chinese reality show Sisters Who Make Waves, with a special focus on the discursive shifts and their relevance to the wider discourse of and about Chinese women. The analysis is carried out on two levels: the discursive construction of Chinese women in the said reality show and its recontextualisation across other discourses including in the public sphere and semi-private opinions of Chinese women.
This research discusses the discursive construction of Chinese women in the Chinese media field and the discrepancy between “top-down” and “bottom-up” discourse. The project uses a multi-layer theoretical framework situated in media and society, gender and media representation, celebrity culture and digital labour to explore the discursive construction of Chinese women. The study applies to the reality show as the primary context, media perceptions as the recontextualising context, interviews with female employees in the Chinese internet industry as the secondary context. In order to investigate the arguments and discursive strategies in different contexts, this study employs a multilevel model of the Discourse-Historical Approach (DHA) in Critical Discourse Analysis (CDA).
The findings discover that the said reality show focuses on the topos of age and the topos of beauty. These two main topoi cause different representations of social actors in Chinese media perceptions. As the representatives of female digital labour, the female employees in the Chinese internet industry construct three discursive strategies of self and relate their self-perception to those of other women. Furthermore, the study implies the discursive shifts in the discourse on Chinese women. This thesis contributes to understanding the discursive construction of women in the Chinese context, particularly the media and gender representations in the Chinese hybrid media system. In addition, this study stands outside the Western world and expands the understanding of the topic in a non-western setting.
... In the following decades, the Chinese labour market has been undergoing remarkable transformations, through improving labour mobility, increasing managerial autonomy and incentives, profit sharing, privatisation of small and medium SOEs, and introducing labour contracts, social insurance, pension and housing reforms etc., despite remaining barriers (Knight & Song, 2005;Cai, Park & Zhao, 2008;Meng 2012). As the labour market becomes increasingly decentralized and marketized, the returns to education, especially HE, increased significantly starting in the mid-1990s (Zhang et al. 2005;Zhang & Zhao 2007;Li et al. 2017a). ...
... Commission (Meng, 2012). However, due to the low social status and living conditions of teachers, teacher education students came disproportionately from relatively lower part of the ability distribution and lower income families, especially for males and poorer remote regions (Zhou & Reed, 2005). ...
We examine the teacher labour market in China using the 2005 mini-Census, in the context of the transformation of the world's largest education system. We first document a significant increase not only in quantity, but also in quality of teachers during 1990–2005. Instrumental Variables results based on the natural experiment of a substantial expansion of higher education in 1992/93 indicate a large positive causal effect of the expansion on supply of teachers. Consistent with differential opportunity costs across graduate occupations, the supply effect is more pronounced for women and those living in less developed regions. Further analyses of differential college premiums in earnings and non-pecuniary benefits between teaching and non-teaching occupations suggest that teacher recruitment has become more market-oriented and flexible, in attracting low to lower-middle ability college graduates into teaching in an increasingly decentralized and competitive graduate labour market.
... We focus on the rural sample in our regression because the urban sample would include migrants from rural areas whose hometowns are unknown. In 1990, when the population census was taken, children ages 0 to 19 in rural areas were likely to stay where they were born with their grandparents or other relatives rather than moving with their parents to a city (Meng, 2012). One reason is that the government restrictions known as the hukou system make it hard for rural children to obtain schooling or other social services in the cities. ...
... Second, the hukou system requires that the death certificate reports the hukou or place of birth, and that information is checked by a local official who provides an official stamp of verification on the death certificate. Third, according to Meng (2012), massive migration did not occur until the end of the 1990s and the direction of migration is from inland to coastal areas and from rural to urban areas. 32 To address the concern of outmigration, we also restrict our sample to the early period of the 1990s and exclude the largest destination provinces of migration as robustness checks. ...
... The above reform and opening-up in China has significantly contributed to its economic growth, especially in the labour-intensive industries, with their swiftly growing demand for a low-skilled labour force (Meng, 2012), especially after China's entry into the World Trade Organization (WTO) in December 2001. Along with the economic development, Hukou reform has been triggered to meet the requirements of free mobility in China because the old Hukou system, which rigidly registered Chinese citizens separately in its urban and rural areas, effectively prevented peasants from flowing into cities with relatively developed economy. ...
... For detailed historical account of this period, see, e.g.,Li et al. (2012), andMeng (2012). ...
This paper presents alternative unemployment statistics for China, encompassing the extended unemployment rate (U5), which incorporates marginally attached workers, and the nonemployment index (NEI) proposed in recent literature (Hornstein et al. in Econ Q 100(1):1–21). The analysis spans from 1988 to 2021, merging recent data (2012–2018 and 2018–2021) with early estimates (1988–2009). Our findings indicate that both standard and alternative unemployment statistics reveal similar trends in China: a rise in the labor force participation rate and a decline in the unemployment rate since 2012, marking a reversal from the trend before 2009. Additionally, unemployment measures in China align more closely with those of affluent countries from 2007 to 2018 and with less affluent countries from 2018 onwards. Moreover, U5 demonstrates enhanced predictive capabilities for wage dynamics in China’s labor market during the recent 2012–2018 period. Lastly, we delve into the discussion of errors in labor market status data.
... The public sector usually offers equal benefits like health insurance, pensions, and maternity leave. These measures mitigate the economic losses that women may incur due to family responsibilities throughout their careers [43]. However, the private sector and the collective economic sector may provide fewer welfare benefits, which could contribute to an increase in the gender wage gap. ...
Although the Chinese government has implemented a variety of measures, the gender wage gap in 21 st century China has not decreased. A significant body of literature has studied this phenomenon using sector segmentation theory, but these studies have overlooked the importance of the collective economy beyond the public and private sectors. Moreover, they have lacked assessment of the gender wage gap across different wage groups, hindering an accurate estimation of the gender wage gap in China, and the formulation of appropriate recommendations. Utilizing micro-level data from 2004, 2008, and 2013, this paper examines trends in the gender wage gap within the public sector, private sector, and collective economy. Employing a selection bias correction based on the multinomial logit model, this study finds that the gender wage gap is smallest and most stable within the public sector. Furthermore, the private sector surpasses the collective economy in this period, becoming the sector with the largest gender wage gap. Meanwhile, a recentered influence function regression reveals a substantial gender wage gap among the low-wage population in all three sectors, as well as among the high-wage population in the private sector. Additionally, employing Brown wage decomposition, this study concludes that inter-sector, rather than intra-sector, differences account for the largest share of the gender wage gap, with gender discrimination in certain sectors identified as the primary cause. Finally, this paper provides policy recommendations aimed at addressing the gender wage gap among low-wage groups and within the private sector.
... Because urban incomes are higher than rural incomes, many younger members of rural households move from rural communities to take jobs in other sectors, often as temporary workers (Zou, Mishra, and Luo 2018). Even though surveys show that less than 9 percent of rural migrant workers showed a willingness to return to their rural communities to farm, rural workers who have not been formally reclassified under hukou are usually unwilling to relinquish their land-use rights since they do not receive urban hukou benefits (Meng 2012;Yang 2013). The ongoing restructuring of rural labor markets has an additional impact on agricultural land. ...
This report reviews current agricultural policies in China and their role in support of China’s broader
environmental goals. The policies reflect an expansion of agricultural policy objectives to better manage
China’s limited and overburdened natural resources. The report anchors its discussion of current policy
with a description of past policies and past technology choices, emphasizing their impacts on land, water,
and air. Collectively, these decisions launched a remarkable period of expansion for China’s farm sector but
left the country’s ecosystems scarred and natural resources depleted. We review how a growing
agricultural sector contributed to economic growth, poverty reduction, and the transformation of China’s
economy, labor markets, and farm structure, and the consequences of those changes for the sector, for new
production technology choices, and for agricultural policy. We then discuss the evolution of China’s broader
environmental goals and link them to changes in agricultural policy designed to mitigate the effects of
agricultural pollution and resource use while meeting a growing demand for agricultural products. We
review the set of new greener technologies central to China’s twin goals of reducing agriculture’s
environmental footprint and sustaining decade-long sector gains in output and productivity. We then
describe challenges that policymakers and the private sector must solve to implement China’s well-
articulated vision of a cleaner and sustainable future for agriculture. Chief among these challenges is a need
to quickly realign China’s farm structure, agricultural institutions, and governing process and the skills
embedded in them to accommodate a diverse set of technologies and an interconnected set of multisector
goals and objectives that mark a significant departure from the past.
Broadly, this report examines the overlap between agricultural and natural resource management (NRM)
policies, policies that touch on the multiple ways humans interact with their natural environment. This
creates a challenge when setting out the report’s scope. To manage the report’s length, we emphasize the
sector’s impact on domestic natural resources but do not discuss fully the important impacts through trade
of China’s domestic food system on natural resources elsewhere. For the same reason, we emphasize efforts
to support greener agricultural production technologies that limit pollution and use natural resources more
efficiently but do not cover a complementary set of off-farm supply-chain technologies and food-system
policies that could also limit agriculture’s natural resource footprint. While Li et al. (2022), in a companion
article, review the composition and degradation of China’s varied landscapes, including its environmentally
valuable forests and marshlands, our primary policy focus is on the sustainable management of croplands
and grasslands.
The report draws on material from a collaborative program of applied research undertaken between 2020
and 2022 by several Chinese universities and research agencies, the World Bank, and international
researchers from the Food and Agriculture Organization, the International Food Policy Research Institute,
and Michigan State University. Some 20 background papers were prepared on topics relating to China’s
agricultural and environmental performance, institutions, initiatives, and policies. This work was
subsequently synthesized into a set of shorter papers focused on (1) the evolution of China’s agricultural
sector, policies, and public expenditures; (2) agricultural innovation, including low-carbon agriculture; (3)
natural resources management; and (4) agricultural pollution prevention and control. These working
papers and a compendium of the four shorter papers can be found at (link to be provided once docs are
uploaded)
... At the same time, because urban incomes are higher than rural incomes, many younger members of rural households move from rural communities to take jobs in other sectors, often as temporary workers (Zou, Mishra, Luo 2018). Even though surveys show that less than 9 percent of rural migrant workers showed a willingness to return to their rural communities to farm, rural workers who have not been formally reclassified under hukou are usually unwilling to relinquish their land-use rights, in part because they do not yet receive urban hukou benefits (Meng 2012;Yang 2013). This keeps the effective control of land fragmented. ...
China’s agricultural sector has grown rapidly for more than four decades, driven by productivity gains and intensification. Other parts of the economy grew rapidly as well. With economic growth, average incomes in China rose, and poverty rates fell dramatically. Labor markets restructured as rural agricultural workers moved to take higher-paying manufacturing and service jobs in larger towns and cities.
The widespread adoption of Green Revolution technologies, market reforms, and public investment triggered the initial decades of agricultural productivity gains. Because the innovations were primarily biological and embodied in cultivars, the technologies worked well on China’s small farms. Nevertheless, while land-saving, the technologies placed a heavy burden on China’s natural resources. A growing manufacturing sector and a growing urban population added to the burden, and pollution from multiple sectors degraded China’s land, water, and air.
This paper describes the recent evolution of China’s agricultural policy to better balance production and productivity goals with natural resource protection and remediation. The architecture of this policy relies on adopting a new set of technologies. Some of the new technologies draw on traditional agricultural sciences, including plant breeding and agronomy, but others rely on a new generation of digital platforms, telecommunication and navigation systems, satellite and surface remote sensing systems, and a new breed of smart machines that use resources more efficiently. This paper examines efforts to promote these technologies and highlights lessons from key ongoing pilots.
Unlike earlier innovations that worked on farms of all sizes, many of the new technologies exhibit economies of scale. China’s agricultural labor force is aging, which will speed up the consolidation of farms. And the technologies described in this paper are well-suited to a future Chinese agricultural sector made up of larger and more capital-intensive farms. Recent market innovations in pricing water and speeding up the consolidation of use rights to mimic large farms will help. However, made urgent by growing demand and hampered by a shifting natural resource base due to climate change, the rollout of key resource- and labor-saving technologies face challenges in the near term since China’s agriculture and the institutions that support it remain structured around small farms. Still, these innovations in markets and the adoption of greener technologies can have cascading consequences for the management of agricultural policy for China’s large research and extension institutions, private and public service providers, and farmers.
... This substantial increase in public childcare services demonstrated the government's commitment to supporting working parents and alleviating the burden of childcare. As a result of these policy changes, urban women's labor participation rate increased to 75% by 1988 (Meng 2012). ...
This article studies the intricate dynamics of family resilience within the Chinese
productivist regime over the course of seven decades, emphasizing the instrumental role of public policy in shaping this resilience. Drawing on a dynamic approach,
the research demonstrates how, across distinct periods of central planning and economic reform, policies have persistently harnessed families to advance economic
objectives. Showing that the productivist regime’s double-edged role on family resilience emerged while public policies bolstered short-term family resilience in times of
sustained economic growth and favorable demographics, and signs of family sector
downturn—declining fertility rates, family dysfunctions—became evident, the current
article underscores the challenges of a model that primarily perceives families as economic instruments. Advocating for a policy paradigm shift that harmonizes economic
ambitions with family well-being, this study ofers valuable insights for policy-makers
and lays the groundwork for future research in comparative welfare systems.
... Therefore, it is imperative to understand the impact of robot adoption on the labor market, particularly in the context of China, which exhibits unique labor market characteristics. First, China, often referred to as the "factory of the world," boasts well-established labor-intensive industries with a significant workforce of low-skilled laborers (Meng, 2012). These workers are particularly susceptible to the effects of automation (Acemoglu & Restrepo, 2019). ...
... Therefore, these firms find it difficult to fire workers on the basis of added environmental compliance costs, unless they are shut down. Meanwhile, workers in industrial sectors are mainly local residents due to China's household registration (hukou) system, which restricts workers to move across regions to find a job in a formal sector (Meng, 2012;F. Wang, Liang, & Lehmann, 2021). ...
This paper uses panel data of millions of Chinese industrial firms between 2001 and 2010 to investigate the employment impact of environmental regulation. The emission reduction mandates of sulfur dioxide (SO2) in China's 11 th Five-Year Plan period (2006-2010) are explored as a quasi-natural experiment to identify the causal effect. Our difference-indifferences framework documents consistent evidence that air pollution regulation has increased the number of workers hired by industrial firms by up to about 1%. We further show that the effect differs across industries, being smaller in those that emit more SO2, and confirm a factor substitution channel of these effects. A back-of-the-envelope calculation shows that the air pollution regulation costs industrial firms heavily, which is up to half of its benefits, suggesting the need to upgrade China's environmental regulations with more market-based policy tools.
... In other words, we find no evidence to support the idea that robots are crowding out migrant workers in prosperous cities. This is good news for those migrant workers that have already endured plenty of survival pressure in their destinations(Chan, 2009;Meng, 2012;Zhou & Hui, 2022). This also coincides with China's new urbanization strategies attempting to further facilitate the process of settling migrant workers in urban areas 3 . ...
The heated debate on automation-vs-labor pulls at the heartstrings of many in both academia and industry, as automation can trigger dramatic adjustments in the urban labor market. Yet, little is known about how migrant workers respond to such technological advances. To contribute to this debate, this paper empirically investigates the effects of automation (proxied by exposure degree of industrial robots) on the settlement intention of migrant workers in urban China. Employing data from the China Migrants Dynamic Survey (CMDS) 2014-2017, our results reveal that cities with greater exposure to industrial robots are more likely to attract migrant workers to settle. Yet, the promotion of settlement intentions is more pronounced for migrant workers at the high and low tails of the skill distribution, leading to a U-shaped selection. In line with our theoretical predictions, mechanism analyses confirm that this nonlinearity is mainly due to the displacement of routine-intensive occupations, the reinstatement of high-skilled machine-complementing occupations, and the indirect booming in service-related occupations at all skill levels. Our findings raise concerns about the polarization of skills and wages among migrant workers despite the fact that they generally benefit from automation.
... The second feature is that the number of migrants from rural to urban areas has grown. According to Meng (2012), the number of rural migrants working in cities increased slightly from 25 million to 37 million between 1990 and 1997, but by 2009, the number of rural migrants to China's cities had almost quadrupled to reach 145 million. The rapid growth in labor mobility can be attributed to the reform of the Hukou system (household registration), as the government initiated reforms to relax the restrictions imposed by the system. ...
How does product expansion via imitation promote innovation? To answer this question, I develop a quantitative multi--product framework of innovation and imitation. The model enables firms to innovate or imitate in multiple technology trajectories to expand their knowledge base. Subsequently, the knowledge base serves as an input for new innovation or imitation. Calibrated by Chinese data, the results suggest that two-thirds of the private knowledge in individual firms is generated through imitation, due to the non-rivalry of knowledge, and contributes significantly to future innovation. Unlike in single--product models, larger firms with greater knowledge capital exhibit higher efficiency in product expansion either through imitation or innovation. Therefore, enhanced knowledge spillover results in improved inequality.
... Some international companies opt to remain in China due to the allure of its expansive consumer market, burgeoning middle class, and rising disposable income [3]. China's abundant and skilled labor force continues to attract manufacturers [4][5][6], while established relationships with Chinese suppliers pose obstacles to relocating operations. China's robust infrastructure and logistics network further enhance its appeal as a sourcing and distribution hub [7]. ...
As global pressures mount to diversify supply chain strategies beyond China, the concept of "Altasia" has emerged, encompassing 14 alternative countries. This study offers a comprehensive framework describing the historical context, driving factors, and theoretical underpinnings motivating the global shift away from China. Our research model delineates the strategic pathways employed by multinational corporations to navigate the decoupling process, particularly in identifying alternative manufacturing hubs across the Altasia region. This article critically examines the multifaceted challenges and opportunities inherent in Altasia as a collective entity comprising these 14 alternative countries. Furthermore, it explores the transformative implications of this paradigm shift on the broader global supply chain ecosystem. In conclusion, we highlight the forward-looking significance of these findings, shedding light on avenues for future research endeavors in this evolving landscape.
... Due to the imperfect labor market in China and "difference sequence pattern" of social networks (Knight & Yueh, 2008), social capital becomes essentially important for migrant workers to survive and develop in urban areas (Antonio, 2004). Migrant workers who lack urban social capital are mainly engaged in temporary low-income manual labor there, which constrains the accumulation of their human capital and strengthens their dependence on rural land as a result (Wang et al., 2010;Meng, 2012). Using path analysis, Giusta & Kambhampati (2006) found that increased urban social capital of migrant workers helped migrant workers better integrate into cities (Giusta & Kambhampati, 2006). ...
In China, the land arrangement behavior of over 160 million rural-urban migrant workers is closely related to the optimal allocation of rural land resources and sustainable development of urban and rural areas. Although previous studies show that social capital affects migrant workers’ land arrangement behavior, few are empirical studies revealing the relationship between them, and the corresponding interventions remains unclear. Using survey data collected in China’s Henan Province and a multinomial Logit model, this study empirically analyzed the mechanism behind the impact of social capital on migrant workers’ land arrangement behavior from the perspective of social capital. Results illustrate that social capital has a significant impact on the land arrangement behavior of migrant workers. The behavior is significantly correlated with the scale of migrant workers' urban social networks, the degree of urban social trust and urban belonging. The more social capital in urban areas, the higher tendency migrant workers to abandon their land contracting rights and become permanent urban residents. This study reveals the mechanism of social capital affecting migrant workers’ land arrangement behavior, and provides a reference for decision-making with respect to guiding migrant workers’ land management behavior for other countries facing similar social problems.
... In addition, considering the long-term livelihood of landless farmers, scholars pay attention to in-situ urbanization and rural-urban migration (Zhu, 2002). China has been experiencing a rapid process of rural-urban migration since the beginning of the 1990s (Meng, 2012). Numerous studies have examined the determinants of Chinese rural migrants' socio-economic integration into the host urban society (Zhu and Chen, 2010;Liu et al.,2016). ...
The gains and losses of farmers’ welfare brought by China’s land expropriation have been of broad concern, but little literature has focused on the motivation of land-lost farmers to settle in cities. Although the Chinese government has implemented a series of major strategies influencing land-lost farmers’ migration, the citizenization of rural migrants has always been a challenge. Using the data from 2016 China’s Labor-force Dynamic Survey (CLDS), this paper discovers that land expropriation strengthens land-lost farmers’ willingness toward urban settlement. Two underlying mechanisms that may influence the decision of land-lost farmers to settle in cities are revealed: positive economic factors and negative social-cultural factors. The economic incentives caused by land compensation can promote the probability of farmers’ urban settlement intention. However, farmland loss also brought an increased employment risk for farmers. Besides, after the land expropriation, the land-lost farmers have more frequent contact with their old neighbors. These social-cultural factors would hinder the farmers’ willingness toward urban settlement. Our findings are robust using both Instrumental variable (IV) estimation and the propensity score matching (PSM) method. These findings provide a deeper understanding of the economic and social consequences of land expropriation policies. In addition to land expropriation, more attention should be paid to the resettlement of land-lost farmers.
... Due to this system, migration to a different region entails substantial impediments for access to basic public services, such as health, insurance, or education. Recently, the hukuo system regulations have been reformed in some Chinese cities, which has been found to have a significant impact on local labor markets (Zhao 1999;Meng 2012;Bosker et al. 2012). The economic costs of factor misallocation in China have been found to be substantial (Hsieh and Klenow 2009). ...
We analyze how rising labor costs contribute to economic restructuring in China. In a panel of prefectural cities and industries, spanning the years 1999-2007, we employ instrumental variables to identify the effect of increasing local wage levels. We find adverse effects on performance of (low-skilled) labor intensive industries in China’s advanced regions. Consistent with cost-saving industry relocation, such industries expand in other locations, where wages are comparatively low. Comparing locations where such industries expand to those where they do not, we find that both economic complexity and subsequent per capita income increased faster in the former group.
... İlk başlarda köy ile bağlantı koparılmaksızın yakın kasabalara göç edilmesi şeklinde hayata geçen serbestleşme ilerleyen dönemde büyük şehirlere yoğun bir işgücü yığılmasını beraberinde getirmiştir. Dolayısıyla sözü edilen süreç ve yasal düzenlemelerin devamlılığı yoğun bir yedek işgücü ordusunun oluşturulmasına yol açmıştır (Gökten, 2012: 103;Meng, 2012;Sargeson, 2016). ...
The study deals with the historical course of labor in the People's Republic of China. In this sense, it is aimed to address the problems and changes experienced by the working classes in the People's Republic of China, starting from 1949 until today. The main argument of the study is that between the 1949-1978 periods, which is expressed as the planned economy period, and the open economy period after 1978, the exposure of labor to exploitation continued. Although it is accepted that there are differences in the forms and levels of exploitation specific to the mentioned periods, it is aimed to state that the exploitation is permanent. The fact that China, which still defines itself as a socialist country and represents the working class, in practice has a system based on cheap labor and labor exploitation creates a serious contradiction. To support its main argument, the study will include work units called danwei, the concept of the iron rice bowl, the policy of the great leap forward, the hukou system (household registration system) and the impact of these issues on the workforce. It will also include the All China Federation of Trade Unions (ACFTU) and workers' actions.
... 4 More recently, the rural-urban hukou distinction has been eliminated and a unified "residency hukou" system has been implemented in some parts of China, particularly in small cities and towns. It is important to note the fact that, albeit loosened, the hukou system remains in place and continues to affect the size and composition of the internal migration flows in China (Chan and Zhang, 1999;Meng, 2012). Meanwhile, migrant workers are still faced with discrimination in the labour market and in society. ...
This dissertation comprises three independent essays on empirical development and labour economics using data from both the UK and China. Chapter 1 provides the first economic investigation into the treatment effect of the Equality Act (EA) 2010 in Great Britain, which replaced the previous UK Disability Discrimination Act (DDA) 1995, and studies its consequences on disabled people’s labour market status. I find optimistic evidence that the policy change improved the employment and wages of the disabled. In the last two chapters, I study the effects of migration on families and family members left behind,
focusing on the case of China’s Great Migration. In particular, Chapter 2 presents new evidence on the impact of daughters’ and sons’ migrations on the health and well-being of their elderly parents left behind in the rural villages. The migration of daughters increases parents’ outcomes, whereas no similar beneficial effects were found for the migration of sons. Chapter 3 examines the impact of adult children’s migration and remittances on the expenditure decisions of the rural households left behind, comparing households with temporary versus permanent migrants. I conclude that policymakers should view permanent migration as a potential pathway to boost local economic development.
... Due to the rapidly declining fertility rate, new entrants to the labour market will come primarily from the rural hukou population (Meng, 2012). Therefore, reducing the urban-rural educational attainment gap at all levels of education is key to China's future economic growth. ...
China experienced a near 5-fold increase in annual Higher Education (HE) enrolment in the decade starting in 1999. Using the China Household Finance Survey, we show that the Great HE Expansion has exacerbated a large pre-existing urban-rural gap in educational attainment underpinned by the hukou (household registration) system. We instrument the years of schooling with the interaction between urban hukou status during childhood and the timing of the expansion – in essence a difference-in-differences estimator using rural students to control for common time trends. We find that the Great HE raised earnings by 17% for men and 12% for women respectively, allowing for county fixed-effects. These Two Stage Least Squares (2SLS) estimates, which are robust to additional controls for hukou status at birth fully interacted with birth hukou province, can be interpreted as the Local Average Treatment Effect (LATE) of education on earnings for urban students who enrolled in HE only because of the Great HE Expansion. For the selected subsample of respondents with parental education information, we find that the 2SLS returns for students from more disadvantaged backgrounds are at least as high as their more advantaged counterparts, for both genders.
... Con el sistema hukou, alrededor de un tercio de la población urbana tiene un registro de hogar agrícola, lo que restringe su acceso a los servicios sociales y la educación en las ciudades. Los trabajadores con un hukou no local reciben salarios más bajos por el mismo trabajo (en parte debido a la discriminación que no tiene que ver con las habilidades), trabajan más horas y tienen acceso limitado a los servicios públicos y el seguro social (Lee, 2012;Meng, 2012;Yu y Chen , 2012;Song, 2014). Debido a los salarios más bajos, la reproducción social de la fuerza de empleo de los trabajadores migrantes depende de los vínculos familiares con la economía rural. ...
Después de más de dos décadas de crecer a niveles récord, la economía china ha entrado en una “nueva normalidad”. A fin de explicar las raíces de tal transformación, este artículo se apoya en las teorías marxista y de la regulación, con el propósito de identificar las características principales del desarrollo socioeconómico de China en relación con las instituciones que gobiernan su economía, así como los patrones y las contradicciones observables en el proceso de acumulación entre 1995 y 2015. Con el objeto de observar esto último, se miden categorías económicas marxistas como la plusvalía, la composición del capital y las tasas de ganancia, mediante datos de cuentas nacionales y tablas de insumo-producto. Después de un rápido proceso de acumulación predominantemente extensiva, la economía china ahora se enfrenta a un problema doble de sobreproducción y sobreacumulación, y tiene al mismo tiempo dificultades para alejarse de los patrones establecidos de acumulación que han producido estas tendencias a la crisis.
... Though LFP of female non-migrant laborers has been studied intensively, few studies focus on female rural-to-urban migrant laborers. Among the few studies in the literature, Meng (2012) documents that in 2009, the LFP rate of female rural-to-urban migrants was 93.4%, which is higher than the rate we find in 2016 (73.3%). A reduction in LFP among female non-migrant laborers has been well documented (Chen and Ge, 2018;Feng et al., 2017;Hare, 2016). ...
China’s rapid economic growth is associated with a dramatic flow of migrants from rural to urban areas, some of whom purchase properties in their destination cities. The literature shows that homeownership may reduce owners’ mobility and deteriorate their labor market performance. Using data from the 2016 China Migrants Dynamic Survey (CMDS) and the 2017 China Household Finance Survey (CHFS), we examine the effect of homeownership on labor force participation (LFP). We find that, compared to rental migrants, homeowner migrants, particularly married females, are less likely to participate in the labor force. Mechanism analysis shows that commuting time to potential jobs increases after migrants live in their properties and females are more sensitive to commuting costs because of domestic responsibilities.
... The labor market is segregated in China and it is mainly due to the household registration system (hukou) that separates the urban and rural labor markets (Meng, 2012). The urban region has been built as the production center of industrial goods, and urban residents who work in public sectors are eligible to receive a pension from their working unit after retirement. ...
This paper investigates the gender gap in education by dividing it into two parts: the part that comes from intrahousehold discrimination and the part that comes from outside of the family. We develop a novel approach to measure the gender gap in education due to intrahousehold discrimination. Using China Household Income Project (2013) survey data, we find that intrahousehold discrimination accounts for a large part of the gender gap in education. The gap is large and persistent over time in both rural and urban regions, although the overall gender gap in education has declined significantly over time.
... Adjustment to land tenure rights also affects labor allocation of rural households, and more generally, their engagement in off-farm activities. With the greater flexibility in land rental market participation, together with easier access to both local and more distant off-farm labor markets due to reforms in the household registration or hukou system (Meng, 2012), an increasing number of Chinese rural households begin participating in diversified economic activities in addition to farm production, including, for example, local off-farm employment, and migrant work (Deininger et al., 2014;Démurger et al., 2010;Mullan et al., 2011). It is observed that migrant work is more prevalent than local off-farm employment (de Brauw et al., 2002). 2 Contrary to the mainstream finding, Zheng et al. (2020) show that the 2003 RLCL reform led to a significant increase in farmers' agricultural income, which impedes rural-to-urban migration. ...
The 2009 land reform in China marks a move toward a more flexible land tenure system in rural areas. This study evaluates the effect of this reform on rental market participation and household welfare in rural China. Using a four-period nationally representative household-level panel data during 2010–2016, we find that the 2009 land reform increased rental market participation by 6.6 to 7.0 percentage points on average. The effect varies significantly with village and household characteristics. The welfare impact of rental market participation on rural households depends on the type of participation. Specifically, the households renting in land witness an increase in their aggregated income by 10.7% on average through the expansion of farm production, which is accompanied by an increase in aggregated expenditure by approximately 11.2%. Those leasing out their land lose the portion of income on the farm but the aggregated household income is on average statistically unchanged, possibly due to a higher off-farm income and the inflow of land rental income. Along with the statistically unchanged aggregated expenditure, the households leasing out land experience no significant welfare changes after the 2009 land reform.
... Due to the declining fertility rate, new entrants to the labour market in China will come primarily from the rural hukou population (Meng 2012). Therefore, reducing the urban-rural educational attainment gap at all levels of education holds the key to China's future economic growth. ...
... Qualitative research suggests affordability is a priority area for policy support and intervention, as is investment in increasing the supply of schools in areas where poorer immigrants live. 2 The hukou status, China's classification system of urban and rural dwellers according to own or ancestral residence as of [1955][1956][1957][1958], is one of China's most distinct policies for managing internal migration ( Chan and Wang,20 08 ;Chan,20 09 ). It is also an institutional source of inequality ( Meng, 2012 ), as it has been discriminating against rural-urban migrants and their families across various domains: from restricting access to government jobs, public goods and services, to imposing a premium on prices afforded to urban residents. Rural hukou migrants are over-represented in "dirty, dangerous, and demeaning" urban jobs and in self-employment ( Giulietti, Ning and Zimmermann, 2012 ), and experience worse health status than their urban hukou counterparts ( Zhang and Kanbur, 2005 ). ...
... Qualitative research suggests affordability is a priority area for policy support and intervention, as is investment in increasing the supply of schools in areas where poorer immigrants live. 2 The hukou status, China's classification system of urban and rural dwellers according to own or ancestral residence as of 1955-1958, is one of China's most distinct policies for managing internal migration (Chan and Wang, 2008;Chan, 2009). It is also an institutional source of inequality (Meng, 2012), as it has been discriminating against rural-urban migrants and their families across various domains: from restricting access to government jobs, public goods and services, to imposing a premium on prices afforded to urban residents. Rural hukou migrants are over-represented in "dirty, dangerous, and demeaning" urban jobs and in self-employment (Giulietti, Ning and Zimmermann, 2012), and experience worse health status than their urban hukou counterparts (Zhang and Kanbur, 2005). ...
Using the 2013 China Education Panel Survey (CEPS), we study the impact of accessing better schools – a 2008 inclusive education policy through which the central government mandated urban public schools to exempt migrant children from tuition and temporary schooling fees. Whereas the non-disclosure rule regarding geographical location of CEPS sampling units precludes the control of locational characteristics, we identify the causal effect of the policy by exploiting constituent elements of CEPS's primary sampling units. Namely, we only use non-migrant rural hukou children living in counties in the nationally representative sample as the control group (the never-takers), while, in the treatment group, we only include migrant children who are currently living in China's top 120 migrant-receiving counties or city districts, and Shanghai. We also distinguish migrant children who started urban schooling before and after 2008 as separate treatment groups of always-takers and compliers, respectively. Using the Inverse Probability Weighted Regression Adjustment (IPWRA) approach, we find that the average treatment effect of the policy on migrant children is around 0.18 SD, as measured by a standardised cognitive test score – a large effect. We also present complementary evidence that the average treatment effect tends to be larger for municipalities and provincial capitals, consistently with the notion that the (potential) value-added of attending urban schools is higher the larger the initial gap with rural schools.
... Scholars have debated over whether China has reached a point where unskilled rural labor has already been depleted and the Chinese government worries about labor shortages (Cai and Du, 2011;Golley and Meng, 2011;Zhang et al., 2011). While a large number of academic studies contend that Chinese rural surplus labor has already been exhausted and resulted in labor shortages in the urban sector (Cai and Du, 2011;Du and Wang, 2010), others refute that there still are plenty of rural surplus workers who cannot migrate to urban areas due to the institutional restrictions-hukou-that prevent migrant workers' from accessing to urban social welfare (Golley and Meng, 2011;Meng, 2012;Wang, 2014). Deepening labor informalization and labor mobility further complicates out understanding of the nature of Chinese labor shortages. ...
This dissertation is an attempt to understand the politics of welfare inclusion and exclusion in an authoritarian developing country—China. This dissertation empirically focuses on the expansion of two Chinese pension programs—the residency-based pension program and the employment-based pension program—across mainland China’s 31 provinces over 2005-2015 and examines local variation in the composition of beneficiaries and the types of benefits of the pension programs. This dissertation argues that the different membership composition of political insiders—a group of individuals who have right to political representation or participation in a geopolitical community and to whom state actors are held accountable—is key to understanding the variation in welfare inclusion strategies evidenced by sub-nationally different pension expansion patterns. When political insiders overlap largely with those who secure stable employment positions (labor market insiders), a narrow yet generous welfare inclusion mechanism based on one’s employment positions develops. This welfare regime selectively benefits those who have both political and labor market power. When political insiders do not largely overlap with labor market insiders, a broader yet shallow welfare regime that distributes welfare benefits on the basis of citizenship develops, encompassing political insiders who lost their positions as labor market insiders. Structural changes including labor informalization and growing labor mobility play a pivotal role in changing the extent to which political and labor market insiders overlaps and thereby inducing changes in welfare inclusion strategies. Applying this theory in the Chinese contexts, the changing level of overlap between individuals with local citizenship defined by their hukou registration (political insiders) and those who have formal and secure employment positions (labor market insiders) is the key to explain the emergence of dual pension regimes and sub-nationally diverging coverage of the two pension programs—employment-based pension program and the residency-based pension program. In places where most informal employment positions are passed onto local residents and the long-maintained overlap between political and labor market insiders is shattered, welfare programs that encompass a broader segment of society with modest benefits develop. These localities experience a rapid expansion of the residency-based pension program. In places where a large number of informal employment are externalized to non-local workers coming across different provinces and the overlap between political and labor market insiders remains intact, on the other hand, the employment-based pension regime persists. This dissertation project tests these propositions both qualitatively and quantitatively. On the qualitative side, I conducted interviews with government officials, labor NGO activists, firm managers, and scholars in Beijing, Jiangsu, Shanghai, Guangdong, and Sichuan provinces during the fall of 2015 and spring of 2016. On the quantitative side, I analyzed two data sets. First, I compiled a dataset of pension coverage and other demographic and economic aspects of mainland China’s 31 provinces over the period of 2005-2015. The second is individual-level survey data of Chinese labor dynamics conducted in 2012 and 2014 matched by yearbook statistics on the local political economy.
Перспективы инновационного развития инфраструктуры экономики Нахчыванской Автономной Республики.
This study provides causal evidence on the impact of retirement on internal migration in a developing country. Using a fuzzy regression discontinuity design, combined with a nationally representative sample of 228,855 older Chinese adults, we find that retirement leads to an increase in the probability of being a migrant by 12.9 percentage points (an 80% increase in migration). Approximately 38% of the total migration effects can be attributed to intertemporal shifts. The impact is more pronounced for the lower‐educated, those who have restricted access to health insurance and pension and those who come from origins with high accommodation costs. Relying on old age support from adult children in migration is a likely mechanism. Lifting migration restrictions and improving government‐provided benefits for retirees could be helpful to cope with population aging in a developing country.
To take a look at the repute of the gender wage gap in China, the usage of records from China Income and (CHIP) 2018, this paper finds that the gender wage gap nonetheless exists, as men earning a common hourly wage of 5.65 Yuan and sizable annual profits of 17,637 Yuan greater than women. Men additionally work a common of third hours per week extra than women. Ols regression evaluation discovered that all men's common wage profits have been 24.4% greater than women's common hourly wage earnings. They learn about additionally confirmed that people who are insured, have an employment contract, or whose administrative center affords social advantages earn extensively greater hourly wages than employees who do no longer have these advantages.
This paper examines the evolving patterns of bilateral city-to-city manufacturing investment flows from 2000 to 2015 in China, which are aggregated from detailed firm-level investment transactions based on the administrative business registration database. The coastal regions were a more favorable destination for manufacturing investment prior to 2006 despite their higher wage levels. Since then, the trend has reversed, that is, the inland regions have attracted a growing share of manufacturing investment. The pattern is more pronounced for labor-intensive manufacturing industries. The wage gap between coastal and inland cities is the main driver behind the giant “flying geese”—the relocation of manufacturing firms from coastal to inland areas.
We investigate circumstances in which referral-based hiring can exacerbate rather than mitigate agency problems. When incentive contracts cannot fully align employees’ incentives with the interests of the firm, employees may behave opportunistically. Referred job candidates likely obtain inside information from existing employees about opportunistic incentive responses, and it is this information that exacerbates agency problems. Our research setting enables us to distinguish between referred and nonreferred employees. It also features a context in which the incentive contract consists of two measures with different properties (efficiency and quality), which allow for opportunistic incentive responses, i.e., sacrificing quality for efficiency. We find that referred employees focus more on efficiency and less on quality than nonreferred employees. We further document the persistence of this behavior and the differential departure likelihood of referred and nonreferred employees. Our findings suggest that referral-based hiring can exacerbate agency problems when incentive contracts allow for opportunistic gains.
Data Availability: All data are proprietary. Confidentiality agreements prevent the authors from distributing the data.
This paper investigates whether and how employee quality affects corporate social responsibility (CSR). We find that firms with a high‐quality workforce are associated with more CSR engagement. We use an exogenous shock of household registration reform in China to employee mobility to support a causal inference. The main effect is more pronounced among firms whose human capital has more value‐added (e.g., firms in high‐tech industries, firms with more R&D investment, and patent filings). Further, we show that employees' bargaining power and monitoring role are potential channels through which employee quality affects CSR. Finally, our results also demonstrate that the employee quality effect is economically sizeable and generates positive externalities on future financial performance and firm value.
This paper develops a dynamic general equilibrium model with endogenous rural–urban migration to analyse the provision of rural and urban government services in China, with special emphasis on the role of the household registration (hukou) system in shaping its urbanization process. It argues that China's urban bias policy, which is enabled by the hukou system restricting rural–urban migration, did not necessarily reduce economic efficiency. Rather, it might have only raised urban welfare at the expense of rural residents. As the hukou system also ties people to particular geographical locations, this paper argues that China's continuous bias towards coastal and big cities has started to cause economic inefficiency as well as inequality. It suggests that progressive hukou reform reducing barriers to cross‐region migration would improve economic efficiency and welfare.
This paper studies how the scarcity of different types of workers in a region shapes firm innovation across industries, using the unbalanced regional sex ratios in China as a source of identification strategy. The empirical results show that the shortage of female workers has spurred firms in female‐intensive industries to innovate more, particularly in industries with low substitution between female and male workers, consistent with the price effect of the directed technical change theory. In male‐intensive industries with high elasticity of substitution and regions with more skewed local sex ratios, firms are more innovative, demonstrating that the market size effect of the directed technical change theory is also at play.
Market transition theory implies that increased market competition generates incentives for allocating job resources based on educational credentials and marketable skills, in contrast with traditional patronage systems that allocate employment opportunities through network membership. Yet despite the breakdown of patronage systems, further development of market institutions result in greater uncertainty, job precarity, and competition, which may promote referral hiring and diffusion of job information through social networks. This paper explores the relationship between marketization and access to employment opportunities through social networks (specifically the receipt of unsolicited job leads). Data from the Social Capital China Survey suggest that growing marketization across provinces is positively associated with receipt of unsolicited job leads. In particular, private sector development, factor market development, and legal intermediary proliferation are significantly and positively associated with an individual’s chance of receiving unsolicited job leads. The findings help clarify the mechanisms through which marketization facilitates informal exchange of job information, advancing scholarship on how concrete institutional conditions shape the significance of social networks.
Using the 2017 China Household Finance Survey (CHFS), we estimate the effect of higher education on entrepreneurship for prime-aged males. We use the higher education expansion in China starting in 1999 and instruments of pre-school hukou status to help identify causal effects, and distinguish between own-account workers and employers of small and large businesses, respectively. While the Inverse Probability Weighted Regression Adjustment estimates show that people with more education are generally less likely to become entrepreneurs, obtaining any qualification beyond the baseline of compulsory schooling significant increases large business ownership later in life, with the maximum effect corresponding to a 3-fold increase for university graduates. We attribute this effect to graduates taking full advantage of the opportunities presented by access to education earlier on in their lives.
INTRODUCTION. Since economic reforms began in 1978, the Chinese labor market has undergone a set of remarkable transformations that have dramatically affected the working lives and welfare of China's citizens. Like other rapidly growing developing countries, China has experienced a rapid structural change, featuring a steady flow of labor from agriculture to industry and from rural areas to urban areas. As a transition economy, China has shifted gradually from planned allocation of labor in state-sector jobs to a more open labor market, with increasing numbers of workers employed in the non state and private sectors. Table 6.1 summarizes the magnitude of these changes, drawing upon official data. From 1978 to 2005, the share of labor employed primarily in agriculture fell from 71 to 45 percent, the share of labor working in urban areas increased from 24 to 36 percent, and the share of urban labor working in the state-owned or government sectors fell from 78 to 24 percent. Although the large magnitudes of these changes are impressive, reform of the labor market has been halting, uneven, and difficult, with much additional reform required if China is to complete its transition successfully while maintaining its rapid development trajectory. Many of the challenges of labor market reforms relate to the political difficulty of moving away from a set of institutions and policies that privileged the welfare of urban workers by guaranteeing employment in state enterprises and imposing strict restrictions on population mobility.
Based on county-level data in 1997 and 1999, this study attempts to document resource utilization and disparities in compulsory education in China. It found that while the pattern of resource utilization was similar across different areas in the country, there were substantial disparities in the level of per-student spending across these areas. The spending gap was particularly substantial between urban and rural areas, and between coastal region and other regions. Although non-minority areas spent more than minority areas, the gap was relatively modest. Five measures of inequality were estimated and they showed a remarkable consistency in demonstrating a large degree of inequality in school spending at both primary and lower- secondary levels nationwide in 1999. Decomposition of the Theil indexes indicated that between two-thirds and three-quarters of financial inequality resided within provinces, and between one- quarter to one third of the financial inequality existed between provinces. For the urban and rural groups, the decomposition also showed that the great majority of the inequality resided within these groups instead of between these two groups. Comparison of 1997 and 1999 results showed that nationwide, there was no significant change in the overall level of inequality in per-student total spending. However, in the same period, the spending gap increased between counties at the top-end and bottom-end of the spending distribution; per-student total spending increased much faster at the top end than at the bottom end. The spending gap also increased between urban and rural areas, and between coastal areas and the rest of the country. The implications of these findings for education policy were discussed.
Although significant earnings differentials between urban residents and rural migrants in Chi-nese cities have been revealed in many studies with single cross-sectional data, it is still not clear how the wage gap between the two groups of workers evolves over time. To fill the research gap, this paper uses a dynamic wage decomposition method and an economic assimilation model with repeated cross-sectional data from China Income Distribution Survey 1999 and 2002 to investigate changes in wage gap between urban residents and rural migrants from a dynamic perspective, and to explore the wage assimilation for new rural migrants towards their urban counterparts and its determinants in Chinese cities. Two technique problems associated with an economic assimilation model are solved: the lack of common support and identification problems. Two interesting results are found. First, there is a growing wage gap between rural migrants and urban residents across the two surveyed years, mainly caused by the decline in the rate of return to education for rural migrants. Second, rural migrants' wages may generally assimilate to those of their urban counterparts, but well-educated rural migrants and those residing in capital cities (i.e., large cities) seem to have no significant advantage in the assimilation process. Both findings imply the current institutional arrangements in the China's urban labour market tend to favour less-educated rural migrants, which in turn may restrict new rural migrants from investing more in their human capital.
Using data from the China Urban Labor Survey conducted in five large Chinese cities at year end 2001, we quantify the nature and magnitude of shocks to employment and worker benefits during the period of economic structuring from 1996 to 2001, and evaluate the extent to which adversely affected urban workers had access to public and private assistance. Employment shocks were large and widespread, and were particularly hard on older workers and women. Unemployment reached double digits in all sample cities and labor force participation declined by 8 percent. Urban residents faced modest levels of wage and pension arrears, and sharp declines in health benefits. Public assistance programs for dislocated workers had limited coverage, with most job-leavers relying upon private assistance to support consumption, mainly from other household members.
The recent policy of labour retrenchment in state-owned enterprises in China (known as xia gang) has important implications for both efficiency and equity. This paper examines the individual-level determinants and consequences of the xia gang policy, using a survey conducted in the year 2000. As many as 11% of urban workers had been retrenched, and 53% of these remained unemployed. The risk of retrenchment was higher for women, the less educated, the low skilled, the middle-aged, and those employed by local government or urban collectives. Reemployment rates are low and imply that unemployment will be long-term. The duration of unemployment is longer for the unhealthy, the less educated, and women with young children. Unemployment benefit has no effect on the duration of unemployment. The income losses from retrenchment stem largely from the loss of earnings while unemployed. However, reemployed workers are paid less than if they were never retrenched.
We employ data from the three most recent Chinese population censuses to consider married, urban women's labor force participation decisions in the context of their families and their residential locations. We are particularly interested in how the presence in the household of preschool and school-age children and/or the elderly and disabled affects women's likelihood of engaging in work outside the home. We find that the presence of older people in the household (any parent or parent-in-law and any person aged 75 or older) significantly increases prime-age urban women's likelihood of participating in market work and that presence of pre-school age children significantly decreases it. The negative effect on women's labor force participation of having young children in the household (compared to no children in the household) is substantially larger in magnitude for married, migrant women than for married, non-migrant urban residents. This appears to be explained, in part, by the practice of married, female migrants leaving their children in the care of relatives in rural areas in order to facilitate their employment.
Prices differ across space: from province to province, from rural (or urban) areas in one province to rural (or urban) areas in another province, and from rural to urban areas within one province. Systematic differences in prices across a range of goods and services in different localities imply regional differences in the costs of living. If high-income provinces also have high costs of living and low-income provinces have low costs of living, the use of nominal income measures in explaining such economic outcomes as inequality can lead to misinterpretations. Income should be adjusted for costs of living. We are interested in the sign and magnitude of the adjustments needed, their changes over time, and their impact on economic outcomes in China. In this article, we construct a set of (rural, urban, total) provincial-level spatial price deflators for the years 1984-2004 that can be used to obtain provincial-level income measures adjusted for purchasing power. We provide illustrations of the significant effect of ignoring spatial price differences in the analysis of China's economy.
This paper applies the recently developed econometric methods of panel unit root tests and nonlinear mean reversion to investigate price convergence in China-the largest transitional economy in the world. We find that prices did converge to the law of one price in China for an overwhelming majority of goods and services, based on a large panel data set. The finding sheds light on the extent of the market economy in China, and casts doubt on Young's proposition that the economic reform has led to the fragmentation of Chinese domestic markets. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
This paper examines the extent of interindustry wage differences for nonunion workers and finds that even after controlling for a wide range of individual characteristics and geographic location a substantial amount of individual wage variation can be accounted for by industry differences. In the aggregate industry effects explain at least 6.7% of inter-personal wage variation. At most they explain 30%. While the importance of industry differences is clear, the reasons for the differences are more difficult to establish. Independent of the problems of interpreting the correlates of industry differences, even the sign of the relation of many variables with wages is difficult to establish when other variables are included as controls. This conclusion is suggested by a literature review and confirmed by an analysis of a large number of alternative specifications of an industry wage equation using individual wage data from the CPS and industry characteristics from a number of recent sources. Only industry average education and industry profitability have the same (positive) sign in every specification and in all the studies reviewed. Of these two only average education was nearly always significantly related to wages. Average establishment size had a nearly consistent positive relation. What does emerge from the analysis is a pattern of correlations. There appears to be one major dimension (and perhaps other less important dimensions) along which industries differ. A principal components analysis of an industry characteristics data set is used to demonstrate this. High wage industries have lower quit rates, higher labor productivity, fewer women, more educated workers, longer work weeks, a higher ratio of nonwage to wage compensation, higher unionization rates, larger establishments and firms, higher concentration ratios and are more profitable. An analysis of a limited number of industry characteristics in 1939 yields a similar pattern. The implications of these results for alternative theories of wage determination are considered.
Since 1980, China and India have achieved remarkable rates of economic growth and poverty reduction. The emergence of China and India as major forces in the global economy has been one of the most significant economic developments of the past quarter century. This paper examines sources of economic growth in the two countries, comparing and contrasting their experiences over the past 25 years. In this paper, we investigate patterns of economic growth for China and India by constructing growth accounts that uncover the supply-side sources of output change for each economy. Some of the results confirm themes that have emerged from the prior literature on the economic development of the two countries, however, some new findings emerge as well. In addition to decompositions of aggregate growth, we construct separate accounts for the three major economic sectors: agriculture; industry; and services. This level of detail enables us to highlight key differences in the development paths taken by China and India. In conclusion, we assess the prospects for future growth in each country.
Economic transition from a planned to a market oriented economy is often associated with a widening of income inequality. The nature of this change, however, may differ during different stages of the economic transition. This paper investigates the increase in income inequality in urban China during two phases of economic reform: a moderate reform era (1988-95) and a radical reform era (1995-99). It is found that although income inequality increased considerably during both stages, the nature and causes of the increase are different. In the moderate reform period, the increase in inequality was a result of some parts of society sharing more of the economic gain than others, and the main cause of this inequality is regional income dispersion. During the radical reform period income reductions at the lower end of the distribution is observed, and it is mainly due to the large-scale unemployment generated by labor reallocation.
The Chinese government has launched two major fertility control policies over the past two decades. The wan-xi-shao--later-longer-fewer--policy of the 1970s and the one-child family policy introduced in 1979. This article examines the demographic impact of these policies by analyzing annual series of mean ages at first marriage, period parity progression ratios, and mean birth intervals for city, town, and rural residents for China as a whole, and for four provinces. The magnitude, direction, and timing of the changes give strong evidence of the impact of the policies. Although the program aimed at achieving the one-child family has received greater attention by most observers, the later-longer-fewer policy had the greater impact on fertility decline.
What are the implications of China's rapid development for East Asia? A number of studies have emphasised the competitive effects of China's low skill-intensive manufacturing sector on East Asian exports. China, however, has recently embarked on a large scale investment in higher education with the aim of addressing skill shortages and the problem of growing wage inequality. This paper provides an analytical perspective on the implications of this policy for China and the East Asian economies. Using a computable multi-sector growth model of China and East Asia, we find that the planned spending on tertiary education generates a long run increase in skilled labour of 33 percent and a strong decline in wage inequality. Nevertheless, we find that in the short run, adjustment costs rise - due to constraints on resources for on-the-job training - wage inequality rises and income falls. The education plan also has significant effects on the structure of trade for China and East Asia, with a shift of East Asia's exports towards less skill-intensive sectors. However, the aggregate effects on East Asia are small and the adjustment in trade patterns is gradual and involves an expansion of agricultural and low- tech manufacturing exports, with only minimal adjustments for other sectors.
The paper examines the contentious issue of the extent of surplus labour that remains in China. China was an extreme example of a surplus labour economy, but the rapid economic growth during the period of economic reform requires a reassessment of whether the second stage of the Lewis model has been reached or is imminent. The literature is inconclusive. On the one hand, there are reports of migrant labour scarcity and rising migrant wages; on the other hand, estimates suggest that a considerable pool of relatively unskilled labour is still available in the rural sector. Yet the answer has far-reaching developmental and distributional implications. After reviewing the literature, the paper uses the 2002 and 2007 national household surveys of the Chinese Academy of Social Sciences to analyse and explain migrant wage behaviour, to predict the determinants of migration, and to examine the size and nature of the pool of potential rural–urban migrants. An attempt is also made to project the rural and urban labour force and migration forward to 2020, on the basis of the 2005 1% Population Survey. The paper concludes that for institutional reasons both phenomena are likely to coexist at present and for some time in the future.
The recent policy of labour retrenchment in state-owned enterprises in China (known as xia gang) has important implications for both efficiency and equity. This paper examines the individual-level determinants and consequences of the xia gang policy, using a survey conducted in the year 2000. As many as 11% of urban workers had been retrenched, and 53% of these remained unemployed. The risk of retrenchment was higher for women, the less educated, the low skilled, the middle-aged, and those employed by local government or urban collectives. Reemployment rates are low and imply that unemployment will be long-term. The duration of unemployment is longer for the unhealthy, the less educated, and women with young children. Unemployment benefit has no effect on the duration of unemployment. The income losses from retrenchment stem largely from the loss of earnings while unemployed. However, reemployed workers are paid less than if they were never retrenched.
Many recent studies claim that China has reached a Lewisian ‘turning point’ in economic development, signalled by rising wages in urban areas and the exhaustion of rural surplus labour. In this paper we show that despite some evidence of rising nominal urban unskilled wages between 2000 and 2009, there is little in the data to suggest that this wage increase has been caused by unskilled labour shortages. China still has abundant under-employed workers with very low income in the rural sector. We argue that China's unique institutional and policy-induced barriers to migration have both prevented many rural workers from migrating to cities and also reduced the migrants' length of stay. We project that under alternative institutional settings, the migrant stock could easily be doubled from the current 150million to 300million by increasing either the average length of migrant stay, or the migrant inflow, or both.
The disagreements on changed stages of demographic transition and the role of a demographic dividend in a dual economy development process often lead to wide debates among scholars about China's development stages. This paper tries to reveal the nexus between demographic transition and dual economy development: the common starting point, close-related processes, and identical characteristics of stages. Based on the empirical evidence of population dynamics, the paper supports the judgment of diminishing demographic dividends and an imminent Lewis turning point in China. The paper also argues that keeping a sustainable and steady economic growth, and becoming a high-income country as early as possible is the key and only way to close the ‘aging before affluence’ gap. Accordingly, the paper concludes by proposing measures to exploit the potential of the first demographic dividend, creating conditions for a second demographic dividend, and tapping new sources of economic growth.
Official Chinese data on urban household income are seriously flawed because of significant underreporting of income by respondents and non-participation by the high income groups in official household surveys. We collected urban household income and expenditure data in a way that increased their reliability and the coverage of the wealthy. We utilized the well-known relationship between Engel's coefficient and income level through two different approaches to deduce the true level of household income for each of the seven Chinese income categories (lowest income, low income, lower middle income, middle income, upper middle income, high income, and highest income). We found that the ratio of our estimated income to official income increased from 1.12 for the lowest income group to 3.19 for the highest income group. Total household disposable income in 2008 is RMB 14.0 trillion according to the official data but RMB 23.2 trillion according to our estimate; and 63 percent of the unreported income went to the wealthiest 10 percent of urban households. The income of the wealthiest 10 percent of Chinese households is really 65 times that of the poorest 10 percent instead of the 23 times reported in the official data. The Gini coefficient is clearly much higher than the usually reported figure of 0.47.
In one of the estimations, we had to drop the 76 wealthiest households (1.8 percent of our sample) from the analysis because there were no super-rich in the official data for us to match characteristics with. We therefore still understate the income of the highest income households. As the amount of unreported income indicates the degree of corruption, it is troubling that it grew 91 percent in 2005–08 compared to the 71 percent growth in gross national income. Serious institutional reforms must be enacted if corruption is not to derail economic development and social harmony.
We document dramatic rising wages in China for the period 1978-2007 based on multiple sources of aggregate statistics. Although real wages increased seven-fold during the period, growth was uneven across ownership types, industries and regions. Over the past decade, the wages of state-owned enterprises have increased rapidly and wage disparities between skill-intensive and labour-intensive industries have widened. Comparisons of international data show that China's manufacturing wage has already converged to that of Asian emerging markets, but China still enjoys enormous labour cost advantages over its neighbouring developed economies. Our analysis suggests that China's wage growth will stabilize to a moderate pace in the near future. Copyright 2010 The Authors. Pacific Economic Review 2010 Blackwell Publishing Asia Pty Ltd
China had separate rural and urban labor markets for about 40 years until the late 1980's when the restrictions on rural–urban migration were gradually eased. By the end of the 1980's and in the early 1990's, the number of rural migrants working in the urban areas began to increase dramatically. However, rural migrants are treated differently from their urban counterparts in terms of occupational attainment and wages. This paper utilizes two comparable survey data sets to analyze the degree to which the segregation between rural migrants and urban residents has occurred from the point of view of occupational segregation and wage differentials. A significant difference in occupational attainment and wages exists between rural migrants and urban residents. Most of the difference cannot be explained by productivity-related differences between the two groups, implying that urban residents are favorably treated while their migrant counterparts are discriminated against. J. Comp. Econ., September 2001, 29(3), pp. 485–504. Australian National University, Canberra, ACT 0200, Australia; Chinese University of Hong Kong, Shatin, N.T., Hong Kong, China. Copyright 2001 Academic Press.Journal of Economic Literature Classification Numbers: J71, J40, O15, P23.
China's market-oriented labor market reform has been in place for about one and a half decades. This study uses individual data for 1981 and 1987 to examine the success of the first half of the reform program. Success is evaluated by examining changes in the wage setting structure in the state-owned sector over the reform period. Have the market reforms stimulated worker incentives by increasing the returns to human capital acquisition? Has the wage structure altered to more closely mimic that of a market economy? In 1987, there is evidence of a structural change in the system of wage determination, with slightly increased rates of return to human capital. However, changes in industrial wage differentials appear to play the dominant role. It is argued that this may be due to labor market reforms, in particular the introduction of the profit related bonus scheme.J. Comp. Econom.,December 1997,25(3), pp. 403–421. Australian National University, Canberra, ACT0200, Australia and University of Tasmania, Hobart, Tasmania, Australia, and University of Aberdeen, Old Aberdeen, Scotland AB24 3QY.
While increasing income inequality in China has been commented on and studied extensively, relatively little analysis is available on inequality in other dimensions of human development. Using data from different sources, this paper presents some basic facts on the evolution of spatial inequalities in education and healthcare in China over the long run. In the era of economic reforms, as the foundations of education and healthcare provision have changed, so has the distribution of illiteracy and infant mortality. Across provinces and within provinces, between rural and urban areas and within rural and urban areas, social inequalities have increased substantially since the reforms began.
This study provides estimates of the returns to schooling in urban China over an extended period of economic reforms. We find a dramatic increase in the returns to education, from only 4.0 percent per year of schooling in 1988 to 10.2 percent in 2001. Most of the rise in the returns to education occurred after 1992 and reflected an increase in the wage premium for higher education. The rise is observed within groups defined by sex, work experience, region, and ownership, and is robust to the inclusion of different control variables. The timing and pattern of changing schooling returns suggest that they were influenced strongly by institutional reforms in the labor market that increased the demand for skilled labor. Journal of Comparative Economics33 (4) (2005) 730–752.
This paper examines the effect of the financial crisis on off-farm employment of China’s rural labor force. Using a national representative dataset, we find that there was a large impact. By April 2009 off-farm employment reached 6.8% of the rural labor force. Monthly earnings also declined. However, while we estimate that 49 million were laid-off between October 2008 and April 2009, half of them were re-hired in off-farm work by April 2009. By August 2009, less than 2% of the rural labor force was unemployed due to the crisis. The robust recovery appears to have helped avoid instability.
In the past 20 years the average real earnings of Chinese urban male workers have increased by 350 per cent. Accompanying this unprecedented growth is a considerable increase in earnings inequality. Between 1988 and 2007 the variance of log earnings increased from 0.27 to 0.48, a 78 per cent increase. Using a unique set of repeated cross-sectional data this paper examines the causes of this increase in earnings inequality. We find that the major changes occurred in the 1990s when the labour market moved from a centrally planned system to a market oriented system. The decomposition exercise conducted in the paper identifies the factor that drives the significant increase in the earnings variance in the 1990s to be an increase in the within-education-experience cell residual variances. Such an increase may be explained mainly by the increase in the price of unobserved skills. When an economy shifts from an administratively determined wage system to a market-oriented one, rewards to both observed and unobserved skills increase. The turn of the century saw a slowing down of the reward to both the observed and unobserved skills, due largely to the college expansion program that occurred at the end of the 1990s.
Numerous empirical studies from developing countries have noted that parental education has a robust and positive effect on child learning, a result that is often attributed to more educated parents making greater investments in their children's human capital. However, the nature of any such investment has not been well understood. This study examines how parental education affects various parental investments in goods and time used in children's human capital production via an unusually detailed survey from rural China. It is found that more educated parents make greater educational investments in both goods and time and that these relationships are generally robust to a rich set of controls. Evidence suggests that making greater investments in both goods and time stems both from higher expected returns to education for children and from different preferences for education among more educated parents. A second key finding is that the marginal effect of mother's education on educational investments is generally larger than that of father's education.
In a partially reformed economy, distortions beget distortions. Segments of the economy that are freed from centralized control
respond to the rent-seeking opportunities implicit in the remaining distortions of the economy. The battle to capture, and
then protect, these rents leads to the creation of new distortions, even as the reform process tries to move forward. In this
paper I illustrate this idea with a study of the People's Republic of China. Under the plan, prices were skewed so as to concentrate
profits, and hence revenue, in industry. As control over factor allocations was loosened, local governments throughout the
economy sought to capture these rents by developing high margin industries. Continued reform, and growing interregional competition
between duplicative industries, threatened the profitability of these industrial structures, leading local governments to
impose a variety of interregional barriers to trade. Thus, the reform process led to the fragmentation of the domestic market
and the distortion of regional production away from patterns of comparative advantage.
In this paper, we examine the determinants of urban wages in China from 1988 to 2002. We find increased returns to education but a decrease in the returns to experience. The 2002 data imply that the widening pure gender gap and the growth in the premium to Communist Party membership may have come to an end. The reform of the state-owned enterprise (SOE) sector and the shift in industrial structure out of heavy industry is shown to impact wages of workers within those sectors. We use recall panel data for 1998 to 2002 to provide fixed effects estimates of the impact of sector ownership, Communist Party membership and unemployment on wages. Journal of Comparative Economics33 (4) (2005) 644–663.
This paper models and estimates net urban agglomeration economies for cities. Economic models of cities postulate an inverted
U shape of real income per worker against city employment, where the inverted U shifts with industrial composition across
the urban hierarchy of cities. This relationship has never been estimated, in part because of data requirements. China has
the necessary data and context. We find that urban agglomeration benefits are high—real incomes per worker rise sharply with
increases in city size from a low level. They level out nearer the peak and then decline very slowly past the peak. We find
that a large fraction of cities in China are undersized due to nationally imposed, strong migration restrictions, resulting
in large income losses.
Economic transition from a planned to a market oriented economy is often associated with a widening of income inequality. The nature of this change, however, may differ during different stages of the economic transition. This paper investigates the increase in income inequality in urban China during two phases of economic reform: a moderate reform era (1988-95) and a radical reform era (1995-99). It is found that although income inequality increased considerably during both stages, the nature and causes of the increase are different. In the moderate reform period, the increase in inequality was a result of some parts of society sharing more of the economic gain than others, and the main cause of this inequality is regional income dispersion. During the radical reform period income reductions at the lower end of the distribution is observed, and it is mainly due to the large-scale unemployment generated by labor reallocation. Copyright 2004 Blackwell Publishing Ltd.
Lewisian Turning Point during China's Economic Growth " (in Chinese) In Green Book of Population and Labor: Lewisian Turning Point and Its Policy Challenges
- Fang Cai
Cai, Fang. 2007. " Lewisian Turning Point during
China's Economic Growth " (in Chinese). In Green
Book of Population and Labor: Lewisian Turning Point
and Its Policy Challenges (in Chinese), edited by Cai
Fang and Du Yang. Beijing, China: Social Science
Academic Press.
The Chinese Labor Market in the Reform Era In China's Great Economic Transformation
- Fang Cai
- Albert Park
- Yao-Hui Zhao
Cai, Fang, Albert Park, and Yao-Hui Zhao. 2009.
" The Chinese Labor Market in the Reform Era. "
In China's Great Economic Transformation, edited by
Loren Brandt and Thomas Rawski, pp 167–214.
The Dynamics of Transition in China: Change of Ownership Structure and Sustainability of Growth
- Gang Fan
Fan, Gang. 2000. "The Dynamics of Transition
in China: Change of Ownership Structure and
Sustainability of Growth." Paper presented at the
International Conference of China Growth Sustainability in the 21st Century, Canberra, Australia.
Fan, Simon C., and Xiangdong Wei. 2006. "The
Law of One Price: Evidence from the Transitional
Economy of China." Review of Economics and Statistics 88(4): 682-97.
Comments on Change in Employment in China
- Lanrui Feng
Feng, Lanrui. 2003. "Comments on Change
in Employment in China" (in Chinese). In
Employment and Social Security during the Transition (in Chinese), edited by Zheng Gongcheng,
Zeng Xiangquan, Zheng Yushuo, and Zhang
Qiheng. Beijing: China Labor and Social Security
Publishing House.
The Role of Rural Migrants in the Chinese Urban Economy In Migration-Economic Change, Social Challenge Migrant Entrepreneurs and Credit Constraints under Labour Market Discrimination
- Paul Frijters
- Robert G Gregory
- Xin Meng
- Forthcoming
Frijters, Paul, Robert G. Gregory, and Xin Meng.
Forthcoming. " The Role of Rural Migrants in the
Chinese Urban Economy. " In Migration-Economic
Change, Social Challenge, edited by Christian Dustmann. Oxford: Oxford University Press.
Frijters, Paul, Tao Kong, and Xin Meng. 2011.
" Migrant Entrepreneurs and Credit Constraints
under Labour Market Discrimination. " IZA Discussion Paper 5967.
Jobs, Working Hours, and Remuneration Packages for Migrants and Urban Residents Chap. 2 in The Great Migration: Rural-Urban Migration in China and Indonesia Child Education and the Family Income Gradient in China Working Paper
- Paul Frijters
- Leng Lee
- Xin Meng
Frijters, Paul, Leng Lee, and Xin Meng. 2010.
" Jobs, Working Hours, and Remuneration Packages for Migrants and Urban Residents. " Chap. 2 in
The Great Migration: Rural-Urban Migration in China
and Indonesia, edited by X. Meng, C. Manning, with
S. Li, and T. N. Effendi. Edward Elgar Publishing.
Frijters, Paul, Chuliang Luo, and Xin Meng.
2010. " Child Education and the Family Income
Gradient in China. " Working Paper, University of
Queensland.
Urbanization in China: Policy Issues and Options Unpublished manuscript At the author's webpage, http://www.econ.brown Reports for the China Economic Research and Advisory Program
- J Henderson
- Vernon
Henderson, J. Vernon. 2009. " Urbanization in
China: Policy Issues and Options. " Unpublished
manuscript, Brown University. At the author's
webpage,
http://www.econ.brown.edu/faculty
/henderson/ under the link " Reports for the
China Economic Research and Advisory Program. "
Huang, Xinyuan. 2004. " Wage Ranking in
1956 " ( " 1956 Nian De Ding Ji " ). In People's Political
Consultative Times (Ren Min Zheng Xie Bao),
October, 28.
Regional Income Inequality Using Real Income is Smaller than That Using Nominal Income
- Xiaojuan Jiang
- Hui Li
Jiang, Xiaojuan, and Hui Li. 2005. "Regional
Income Inequality Using Real Income is Smaller
than That Using Nominal Income" (in Chinese).
Impact of Economic Slowdown on Migrant Workers Chap. 12 in China's New Place in a World in Crisis: Economic, Geopolitical and Environmental Dimensions
- Sherry Kong
- Xin Tao
- Dandan Meng
- Zhang
Kong, Sherry Tao, Xin Meng, and Dandan
Zhang. 2010. " Impact of Economic Slowdown on
Migrant Workers. " Chap. 12 in China's New Place in
a World in Crisis: Economic, Geopolitical and Environmental Dimensions, edited by Ross Garnaut, Ligang
Song and Wing Thye Woo. Canberrra, Australia:
ANU E Press.
Tertiary Education Expansion and Inequality in Education Opportunity
- Chunling Li
Li, Chunling. 2010. "Tertiary Education Expansion and Inequality in Education Opportunity" (in
Chinese). Sociology Research (She Hui Xue Yian Jiu),
2010(3), pp. 1-34.
Effects of Education on Wage Inequality in Urban China Paper presented at the 6th PEP Research Network General Meeting in Lima
- Xiaohua Li
- Yaohui Zhao
- Lili Lu
Li, Xiaohua, Yaohui Zhao, and Lili Lu. 2007.
" Effects of Education on Wage Inequality in Urban
China: 1988–2003. " Paper presented at the 6th
PEP Research Network General Meeting in Lima,
Peru, June 14 –16, 2007.
Inequality in Tertiary Education, Decision to Enroll in Senior High School, and Rural–Urban Divide
- Chuliang Luo
- Xin Meng
Luo, Chuliang, and Xin Meng. 2010. " Inequality
in Tertiary Education, Decision to Enroll in
Senior High School, and Rural–Urban Divide "
(in Chinese). Unpublished manuscript, Beijing
Normal University.
China's Labour Market Reform Report for the East Asian Analytical Unit at the Department of Foreign Affairs and Trade, Australia. This report formed the basis for Chapter
- Xin Meng
Meng, Xin. 1997. " China's Labour Market
Reform. " Report for the East Asian Analytical
Unit at the Department of Foreign Affairs and
Trade, Australia. This report formed the basis for
Chapter 12 in China Embraces the Market.
Meng, Xin. 2000. Labour Market Reform in China.
The Great Migration in China and Indonesia—Trend and Institutions Chap. 1 in The Great Migration: Rural–Urban Migration in China and Indonesia Two-Tier Labor Market in Urban China: Occupational Segregation and Wage Differentials between Urban Residents and Rural Migrants in Shanghai
- Xin Meng
- Chris Manning
Meng, Xin, and Chris Manning. 2010. " The
Great Migration in China and Indonesia—Trend
and Institutions. " Chap. 1 in The Great Migration:
Rural–Urban Migration in China and Indonesia,
edited by X. Meng and C. Manning, with S. Li, and
T. Effendi. Edward Elgar Publishing.
Meng, Xin, and Junsen Zhang. 2001. " Two-Tier
Labor Market in Urban China: Occupational
Segregation and Wage Differentials between
Urban Residents and Rural Migrants in Shanghai. "
Journal of Comparative Economics 29(3): 485 – 504.