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China's New Labour Contract Law:No Harm to Employment?

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  • Yu-Fu Chen
  • Michael Funke

Abstract

In January 2008, China imposed a new labour contract law. This new law is the most significant reform to the law of employment relations in mainland China in more than a decade. The paper provides a theoretical framework on the inter-linkages between labour market regulation, option value and the choice and timing of employment. All in all, the paper demonstrates that the Labour Contract Law in it´s own right will have only small impacts upon employment in the fast-growing Chinese economy. On the contrary, induced increasing unit labour costs represent the real issue and may reduce employment.

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File URL: http://www.dundee.ac.uk/media/dundeewebsite/economicstudies/documents/discussion/DDPE_220.pdf
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Bibliographic Info

Paper provided by Economic Studies, University of Dundee in its series Dundee Discussion Papers in Economics with number 220.

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Length: 27 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:dun:dpaper:220

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Keywords: China; Labour Contract Law; Real Options; Employment;

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  2. Henrik Jensen, . "Targeting Nominal Income Growth or Inflation?," EPRU Working Paper Series 99-23, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
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  8. Saint-Paul, Gilles, 2000. "The Political Economy of Labour Market Institutions," OUP Catalogue, Oxford University Press, number 9780198293323, September.
  9. Fonseca, Raquel & Lopez-Garcia, Paloma & Pissarides, Christopher A., 2001. "Entrepreneurship, start-up costs and employment," European Economic Review, Elsevier, vol. 45(4-6), pages 692-705, May.
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  12. Yu-Fu Chen & Michael Funke, 2002. "Working Time and Employment under Uncertainty," CESifo Working Paper Series 732, CESifo Group Munich.
  13. Díaz-Vázquez, Pilar & Snower, Dennis J., 2003. "Can insider power affect employment?," Open Access Publications from Kiel Institute for the World Economy 2992, Kiel Institute for the World Economy (IfW).
  14. Yu-Fu Chen & Michael Funke, 2008. "Product Market Competition, Investment and Employment-Abundant versus Job-Poor Growth: A Real Options Perspective," Quantitative Macroeconomics Working Papers 20802, Hamburg University, Department of Economics.
  15. Eberly, Janice C. & Van Mieghem, Jan A., 1997. "Multi-factor Dynamic Investment under Uncertainty," Journal of Economic Theory, Elsevier, vol. 75(2), pages 345-387, August.
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Citations

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Cited by:
  1. Tony Fang & Caroline Gunterberg & Emma Larsson, 2010. "Sourcing in an Increasingly Expensive China: Four Swedish Cases," Journal of Business Ethics, Springer, vol. 97(1), pages 119-138, November.
  2. Richard B. Freeman & Xiaoying Li, 2013. "How Does China's New Labor Contract Law Affect Floating Workers?," NBER Working Papers 19254, National Bureau of Economic Research, Inc.
  3. Gallagher, Mary & Giles, John & Park, Albert & Wang, Meiyan, 2013. "China's 2008 labor contract law : implementation and implications for China's workers," Policy Research Working Paper Series 6542, The World Bank.

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