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How Does China's New Labour Contract Law Affect Floating Workers?

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Listed:
  • Xiaoying Li
  • Richard B. Freeman

Abstract

China's new Labor Contract Law took effect on January 2008 and required firms to give migrant workers written contracts, strengthened labor protections for workers and contained penalties for firms that did not follow the labor code. This paper uses survey data of migrant workers in the Pearl River Delta before and after the law and a retrospective question on when workers received their first labor contract to assess the effects of the law on labor outcomes. The evidence shows that the new law increased the percentage of migrant workers with written contracts, which in turn raised social insurance coverage, reduced the likelihood of wage arrears, and raised the likelihood that the worker had a union at their workplace.
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Suggested Citation

  • Xiaoying Li & Richard B. Freeman, 2015. "How Does China's New Labour Contract Law Affect Floating Workers?," British Journal of Industrial Relations, London School of Economics, vol. 53(4), pages 711-735, December.
  • Handle: RePEc:bla:brjirl:v:53:y:2015:i:4:p:711-735
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    File URL: http://hdl.handle.net/10.1111/bjir.12056
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    References listed on IDEAS

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    1. Rebecca M. Blank, 1994. "Social Protection versus Economic Flexibility: Is There a Trade-Off?," NBER Books, National Bureau of Economic Research, Inc, number blan94-1.
    2. Chen, Yu-Fu & Funke, Michael, 2009. "China's new Labour Contract Law: No harm to employment?," China Economic Review, Elsevier, vol. 20(3), pages 558-572, September.
    3. Blau, Francine D. & Kahn, Lawrence M., 1999. "Institutions and laws in the labor market," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 25, pages 1399-1461 Elsevier.
    4. Mary Elizabeth Gallagher, 2007. "Introduction to Contagious Capitalism: Globalization and the Politics of Labor in China," Introductory Chapters,in: Contagious Capitalism: Globalization and the Politics of Labor in China Princeton University Press.
    5. Justin Yifu Lin, 1989. "An Economic Theory of Institutional Change: Induced and Imposed Change," Cato Journal, Cato Journal, Cato Institute, vol. 9(1), pages 1-33, Spring/Su.
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    Cited by:

    1. You, Jing & Wang, Shaoyang, 2018. "Unemployment duration and job-match quality in urban China: The dynamic impact of 2008 Labor Contract Law," Economic Modelling, Elsevier, vol. 71(C), pages 220-233.
    2. Enying Zheng & Simon Deakin, 2016. "Pricing Labour Capacity: The Unexpected Effects of Formalizing Employment Contracts in China," Working Papers wp479, Centre for Business Research, University of Cambridge.
    3. Pamela Lenton & Lu Yin, 2016. "The Educational Success of China’s Young Generation of Rural-to-Urban Migrants," Working Papers 2016007, The University of Sheffield, Department of Economics.
    4. Enying Zheng & Simon Deakin, 2016. "State and Knowledge Production: Industrial Relations Scholarship under Chinese Capitalism," Working Papers wp480, Centre for Business Research, University of Cambridge.
    5. Joshua Hall & Yang Zhou, 2017. "The Sinuous Dragon: Economic Freedom and Economic Growth in China," Working Papers 17-12, Department of Economics, West Virginia University.

    More about this item

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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