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China's 2008 labor contract law : implementation and implications for China's workers

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  • Gallagher, Mary
  • Giles, John
  • Park, Albert
  • Wang, Meiyan

Abstract

This paper presents empirical evidence from household and firm survey data collected during 2009-2010 on the implementation of the 2008 Labor Contract Law and its effects on China's workers. The government and local labor bureaus have made substantial efforts to enforce the provisions of the new law, which has likely contributed to reversing a trend toward increasing informalization of the urban labor market. Enforcement of the law, however, varies substantially across cities. The paper analyzes the determinants of worker satisfaction with the enforcement of the law, the propensity of workers to have a labor contract, workers'awareness of the content of the law, and their likelihood of initiating disputes. The paper finds that all of these factors are highly correlated with the level of education, especially for migrants. Although higher labor costs may have had a negative impact on manufacturing employment growth, this has not led to an overall increase in aggregate unemployment or prevented the rapid growth of real wages. Less progress has been made in increasing social insurance coverage, although signing a labor contract is more likely to be associated with participation in social insurance programs than in the past, particularly for migrant workers.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6542.

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Date of creation: 01 Jul 2013
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Handle: RePEc:wbk:wbrwps:6542

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Keywords: Labor Markets; Labor Policies; Labor Standards; Work&Working Conditions; Labor Law;

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  1. Michael Funke & Yu-Fu Chen, 2009. "China's new labour contract law: No harm to employment?," Quantitative Macroeconomics Working Papers, Hamburg University, Department of Economics 20909b, Hamburg University, Department of Economics.
  2. Feldmann, Horst, 2009. "The unemployment effects of labor regulation around the world," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 76-90, March.
  3. Djankov, Simeon & Ramalho, Rita, 2008. "Employment Laws in Developing Countries," CEPR Discussion Papers 7097, C.E.P.R. Discussion Papers.
  4. Richard B. Freeman, 2007. "Labor Market Institutions Around the World," NBER Working Papers 13242, National Bureau of Economic Research, Inc.
  5. Fallon, Peter R. & Lucas, Robert E. B., 1993. "Job security regulations and the dynamic demand for industrial labor in India and Zimbabwe," Journal of Development Economics, Elsevier, vol. 40(2), pages 241-275, April.
  6. Kaplan, David S., 2008. "Job creation and labor reform in Latin America," Policy Research Working Paper Series 4708, The World Bank.
  7. Giles, John & Wang, Dewen & Park, Albert, 2013. "Expanding social insurance coverage in urban China," Policy Research Working Paper Series 6497, The World Bank.
  8. Amin, Mohammad, 2009. "Labor regulation and employment in India's retail stores," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 47-61, March.
  9. Almeida, Rita & Carneiro, Pedro, 2005. "Enforcement of labor regulation, informal labor, and firm performance," Policy Research Working Paper Series 3756, The World Bank.
  10. Ahsan, Ahmad & Pagés, Carmen, 2008. "Are All Labor Regulations Equal? Evidence from Indian Manufacturing," IZA Discussion Papers 3394, Institute for the Study of Labor (IZA).
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