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Contrasting paradigms: segmentation and competitiveness in the formation of the chinese labour market

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Author Info

  • Simon Appleton
  • John Knight
  • Lina Song
  • Qingjie Xia

Abstract

An urban labour market is in the process of being formed in China. The objective of this paper is to analyse the stage that it has reached. A 1999 household survey is used to investigate whether the labour market has three tiers comprised of recently retrenched and re-employed urban workers, non-retrenched urban workers, and rural-urban migrants. It tests whether wage levels and structures differ across these categories of worker. Panel data are used to model the evolution of the wage structure and, specifically, the impact of retrenchment and re-employment. The results indicate that non-retrenched urban workers enjoy a wage premium, although migrants receive similar returns to education. Re-employed workers receive no return to education and appear to have lost out on the wage rises enjoyed by the non-retrenched. There is evidence to suggest that the urban labour market is segmented into these categories, which differ in their openness to market competition. The urban labour market has a long way to go before it is fully competitive.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Chinese Economic and Business Studies.

Volume (Year): 2 (2004)
Issue (Month): 3 ()
Pages: 185-205

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Handle: RePEc:taf:jocebs:v:2:y:2004:i:3:p:185-205

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Related research

Keywords: Chinese labour market; retrenchment; unemployment; re-employment; wages; migration; JEL classifications: J31; J42; O15; P23;

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References

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  1. Bruce C. Fallick, 1996. "A review of the recent empirical literature on displaced workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(1), pages 5-16, October.
  2. Stephen Nickell & Tracy Jones & Glenda Quintini, 2000. "A picture of job insecurity facing British men," LSE Research Online Documents on Economics 20141, London School of Economics and Political Science, LSE Library.
  3. Appleton, Simon & Knight, John & Song, Lina & Xia, Qingjie, 2002. "Labor retrenchment in China: Determinants and consequences," China Economic Review, Elsevier, vol. 13(2-3), pages 252-275.
  4. John Knight & Lina Song, 2003. "Increasing urban wage inequality in China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(4), pages 597-619, December.
  5. Dong, Xiao-yuan & Bowles, Paul, 2002. "Segmentation and discrimination in China's emerging industrial labor market," China Economic Review, Elsevier, vol. 13(2-3), pages 170-196.
  6. Knight, J & Song, L & Huaibin, J, 1997. "Chinese Rural Migrants in Urban Enterprises : Three Perspectives," Economics Series Working Papers 99190, University of Oxford, Department of Economics.
  7. Knight, John & Song, Lina, 1999. "Employment Constraints and Sub-optimality in Chinese Enterprises," Oxford Economic Papers, Oxford University Press, vol. 51(2), pages 284-99, April.
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