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A Dynamic Analysis of Overstaff in China's State-Owned Enterprises

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  • Xiangkang Yin

    (Department of Economics and Finance, La Trobe University)

Abstract

In early 1998, the new Chinese Premier Zhu Rongji proposed an ambitious new reform plan, which aims to solve the problems of state-owned enterprises (SOEs) within three years. Among these problems, overstaff in SOEs is a key and difficult issue attracting wide concern. This paper establishes a simple macro model to illustrate the possible transition process that overstaff is gradually absorbed by private enterprises and the economy grows along with inactive SOE workers converting into active labour force. It investigates the characteristics of the steady equilibrium where all overstaff has been completely absorbed. The optimal government strategies maximizing household utility and minimizing the period of transition are also discussed.

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Bibliographic Info

Paper provided by School of Economics, La Trobe University in its series Working Papers with number 1999.03.

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Length: 25 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:ltr:wpaper:1999.03

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Keywords: Employment; China; Public Enterprises EDIRC Provider-Institution: RePEc:edi:smlatau;

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Cited by:
  1. David L. Kelly, 2006. "Subsidies to Industry and the Environment," Working Papers 0602, University of Miami, Department of Economics.
  2. Claustre Bajona & David L. Kelly, 2005. "Trade and the Environment with Pre-existing Subsidies: A Dynamic General Equilibrium Analysis," Working Papers 0603, University of Miami, Department of Economics, revised 01 Mar 2006.
  3. Garth Heutel & David L. Kelly, 2013. "Incidence and Environmental Effects of Distortionary Subsidies," NBER Working Papers 18924, National Bureau of Economic Research, Inc.
  4. Zhongmin Wu & Shujie Yao, 2006. "On Unemployment Inflow and Outflow in Urban China," Regional Studies, Taylor & Francis Journals, vol. 40(8), pages 811-822.
  5. Tomasz Mickiewicz & Anna Zalewska, 2002. "Deindustrialisation. Lessons from the StructuralOutcomes of Post-Communist Transition," William Davidson Institute Working Papers Series 463, William Davidson Institute at the University of Michigan.

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