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Adjusting to Really Big Changes: The Labor Market in China, 1989–2009

In: The Chinese Economy

Author

Listed:
  • Wei Chi

    (Tsinghua University)

  • Richard Freeman

    (Harvard University
    NBER)

  • Hongbin Li

    (Tsinghua University)

Abstract

Until China began its post-Mao economic reforms, the country did not have a genuine labor market. State-owned enterprises were the only source of demand for labor. Administrative agencies assigned workers to firms, so individual choice played no part in the determination of labor supply. Then China began the process of transitioning from a state-run economy to a more market-driven one. The early reforms focused on agriculture and product markets but slowly the government freed firms to make labor demand decisions and freed workers to choose their own places of work, creating a genuine labor market. How did this emergent labor market respond to shifts in the supply and demand for labor as China’s urban economy grew rapidly?

Suggested Citation

  • Wei Chi & Richard Freeman & Hongbin Li, 2012. "Adjusting to Really Big Changes: The Labor Market in China, 1989–2009," International Economic Association Series, in: Masahiko Aoki & Jinglian Wu (ed.), The Chinese Economy, chapter 5, pages 93-113, Palgrave Macmillan.
    • Handle: RePEc:pal:intecp:978-1-137-03429-8_6
    DOI: 10.1057/9781137034298_6
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    5. Zhao, Zhong & Zheng, Liang, 2023. "The Births of New Private-Owned Enterprises in an Environment of State-Owned Enterprises," IZA Discussion Papers 16259, Institute of Labor Economics (IZA).
    6. Ralph W. Huenemann, 2014. "The World Bank and China: Future Prospects," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(1), pages 251-256, January.
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    9. Chunbing Xing & Jianwei Xu, 2016. "Regional variation of the minimum wages in China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-22, December.
    10. Liang Zheng, 2021. "The impact of state-owned enterprises on the employment growth of manufacturing in Chinese cities: Evidence from economic census microdata," Urban Studies, Urban Studies Journal Limited, vol. 58(8), pages 1655-1673, June.
    11. Zhang, Yi & Matz, Julia Anna, 2017. "On the train to brain gain in rural China," Discussion Papers 252443, University of Bonn, Center for Development Research (ZEF).
    12. Guangrong Ma & Jianwei Xu & Shi Li, 2015. "The Income Redistribution Effect Of China'S Personal Income Tax: What The Micro-Data Say," Contemporary Economic Policy, Western Economic Association International, vol. 33(3), pages 488-498, July.
    13. Liu, Jing & Xing, Chunbing, 2016. "Migrate for education: An unintended effect of school district combination in rural China," China Economic Review, Elsevier, vol. 40(C), pages 192-206.

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    More about this item

    Keywords

    Labor Market; Business Cycle; Wage Inequality; Earning Growth; Earning Differential;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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