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Labor restructuring in China: Toward a functioning labor market

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  • Dong, Xiao-yuan
  • Xu, Lixin Colin

Abstract

This paper examines the patterns and determinants of the labor restructuring process in China using two large firm-level datasets for the period between 1998 and 2002. We find that the public sector has undergone substantial labor retrenchment. The removal of employment guarantees for state workers has led to substantial employment shifts both within and between sectors. As compared to many Central and East European countries and the countries of the Commonwealth of Independent States in their early phases of transition, China has experienced a more synchronized pace of job destruction and creation as well as higher rates of excessive reallocation. Our results also show that the employment adjustment and downsizing process has been driven largely by market forces. We find a notable resemblance in the patterns of enterprise response to demand shocks across the public and the private sectors. Journal of Comparative Economics 37 (2) (2009) 287-305.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 37 (2009)
Issue (Month): 2 (June)
Pages: 287-305

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Handle: RePEc:eee:jcecon:v:37:y:2009:i:2:p:287-305

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Web page: http://www.elsevier.com/locate/inca/622864

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Keywords: Public-sector downsizing Restructuring Timing and sequencing China;

References

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Citations

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Cited by:
  1. Rickne, Johanna, 2012. "Labor Market Conditions and Social Insurance in China," Working Paper Series 924, Research Institute of Industrial Economics.
  2. Lu, Yi & Png, Ivan P.L. & Tao, Zhigang, 2013. "Do institutions not matter in China? Evidence from manufacturing enterprises," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 74-90.
  3. Rickne, Johanna, 2013. "Labor market conditions and social insurance in China," China Economic Review, Elsevier, vol. 27(C), pages 52-68.
  4. Liu, Hong & Zhao, Zhong, 2011. "Parental Job Loss and Children’s Health: Ten Years after the Massive Layoff of the SOEs’ Workers in China," IZA Discussion Papers 5846, Institute for the Study of Labor (IZA).
  5. Qu, Zhaopeng (Frank) & Zhao, Zhong, 2011. "Evolution of the Chinese Rural-Urban Migrant Labor Market from 2002 to 2007," IZA Discussion Papers 5421, Institute for the Study of Labor (IZA).
  6. Gao, Hang & Marchand, Joseph & Song, Tao, 2011. "The Supply and Demand Factors Behind the Relative Earnings Increases in Urban China at the Turn of the 21st Century," Working Papers 2011-23, University of Alberta, Department of Economics, revised 01 Feb 2012.
  7. Yueping Song & Xiao-yuan Dong, 2011. "Gender and Occupational Mobility in Urban China during the Economic Transition," Departmental Working Papers 2011-01, The University of Winnipeg, Department of Economics.
  8. Fields, Gary S. & Song, Yang, 2013. "A Theoretical Model of the Chinese Labor Market," IZA Discussion Papers 7278, Institute for the Study of Labor (IZA).
  9. Dong, Xiao-yuan & Pandey, Manish, 2012. "Gender and labor retrenchment in Chinese state owned enterprises: Investigation using firm-level panel data," China Economic Review, Elsevier, vol. 23(2), pages 385-395.
  10. Nie, Huihua & Jiang, Ting & Yang, Rudai, 2012. "A Review and Reflection on the Use and Abuse of Chinese Industrial Enterprises Database," MPRA Paper 50945, University Library of Munich, Germany.
  11. Zhu, Rong, 2011. "Individual heterogeneity in returns to education in urban China during 1995-2002," Economics Letters, Elsevier, vol. 113(1), pages 84-87, October.

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