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Present and Future of the Chinese Labour Market

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Author Info

  • Michele Bruni

    ()

  • Claudio Tabacchi

    ()

Abstract

The paper aims to provide a representation, as rich and complete as possible, of the Chinese labour market, both in terms of stock and flow, despite the fact that the statistical information is still rather poor and often inconsistent. It does then document the increasing differences in the level and trends of the main labour market variables at the provincial level. In order to reach a deeper comprehension of the dynamic of the Chinese labour market, the paper analyses two other extremely relevant phenomena: the so called “floating population” and the labour shortages that are more and more frequently affecting the coastal regions. After having provided a demographic background to the Lewis model of development with unlimited supply of labour, the paper shows in which periods China has been obliged to accumulate a large labour surplus, mainly in the agricultural sector, and in which periods and through which mechanisms, including ageing and internal migration, the process of deaccumulation has taken place. More specifically, the paper shows how up to now internal migrations have provided urban areas and coastal regions with an unlimited supply of labour, a factor that has played a major role in boosting the Chinese economic development and determining its typology. In order to reach this result, simple demographic tools have been utilized to estimate the net migration balance of each province and in each province of rural and urban areas, and therefore to define areas of departures and areas of arrival, information not provided by the literature on the floating population. Finally the paper provides a rough estimate of the disguised unemployment in agriculture and of its geographical distribution. After assessing which percentage can represent a possible supply of labour for the modern sector, it will be maintained that China not only is very close to the Lewis turning point (a situation that has already been reached in many coastal areas), but is going to become the world biggest importer of labour. In order to provide its population with living standards comparable to that of the western world, in a reasonable time interval, China needs to continue to grow at an extremely high rate. This will require the capacity to deal with a series of structural problems. Limiting our concerns to the labour market, that is characterized by increasing complexity and regional differentiation, high priority should be given to improve the collection, analysis and dissemination of labour market data; to abolish the one child policy that is totally obsolete in a situation that will be soon characterized by a structural lack of labour supply; to give to the Chinese citizens the right to freely move and change residence, while rapidly regularizing the existing floating population; to raise the legal age of retirement; to plan and implement a structure of t entries in vocational courses and higher educational paths coherent with the expected structure of the labour demand in terms of flows by occupation; to strengthen the Employment service system in order to improve skills matching at the local level, and facilitate the correct allocation of human resources over the national territory, in order to minimize the human and economic costs of future unavoidable internal migrations.

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File URL: http://www.capp.unimore.it/pubbl/cappapers/Capp_p83.pdf
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Bibliographic Info

Paper provided by Universita di Modena e Reggio Emilia, Dipartimento di Economia Politica in its series Center for the Analysis of Public Policies (CAPP) with number 0083.

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Length: pages 56
Date of creation: Feb 2011
Date of revision:
Handle: RePEc:mod:cappmo:0083

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Web page: http://www.capp.unimore.it
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Related research

Keywords: China; labour market; stock and flow; demography; internal migration; Lewis turning point;

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References

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  1. Knight, John & Li, Shi, 2005. "Wages, firm profitability and labor market segmentation in urban China," China Economic Review, Elsevier, vol. 16(3), pages 205-228.
  2. Meng,Xin, 2000. "Labour Market Reform in China," Cambridge Books, Cambridge University Press, number 9780521771269, October.
  3. Knight, John & Song, Lina, 1995. "Towards a Labour Market in China," Oxford Review of Economic Policy, Oxford University Press, vol. 11(4), pages 97-117, Winter.
  4. Paola Bertolini & Francesco Pagliacci, 2010. "Lisbon strategy and EU countries’ performance: social inclusion and sustainability," Department of Economics 0648, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
  5. Giuseppe Marotta, 1997. "Does trade credit redistribution thwart monetary policy? Evidence from Italy," Applied Economics, Taylor & Francis Journals, vol. 29(12), pages 1619-1629.
  6. Knight, John & Song, Lina, 1999. "The Rural-Urban Divide: Economic Disparities and Interactions in China," OUP Catalogue, Oxford University Press, number 9780198293309.
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Cited by:
  1. Ennio Bilancini & Leonardo boncinelli, 2011. "Dynamic Adverse Selection and the Size of the Informed Side of the Market," Department of Economics 0650, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".

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