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Are Wage Increases In Chinese State Industry Efficient? Productivity In Nanjing'S Machine‐Building Industry

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  • ELLIOTT PARKER

Abstract

Since China's economic reform began, wages in state enterprises have increased at rates much faster than the rate of price inflation. This paper investigates the source of this rapid wage increase for a sample of Chinese state‐owned machine‐building enterprises to determine whether increased wages can be best explained by changes in productivity, changes in the output market, or changes in input markets. CES production function estimates find the marginal product of labor was stagnant between 1980 and 1992 but initially higher than wages. Rising wages were therefore consistent with other evidence that the reform process cost the state sector its labor monopsony. (JEL P31)

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  • Elliott Parker, 1999. "Are Wage Increases In Chinese State Industry Efficient? Productivity In Nanjing'S Machine‐Building Industry," Contemporary Economic Policy, Western Economic Association International, vol. 17(1), pages 54-67, January.
    • Handle: RePEc:bla:coecpo:v:17:y:1999:i:1:p:54-67
    DOI: 10.1111/j.1465-7287.1999.tb00663.x
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    References listed on IDEAS

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    6. Parker, Elliott, 1997. "The effect of scale on the response to reform by Chinese state-owned construction units," Journal of Development Economics, Elsevier, vol. 52(2), pages 331-353, April.
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    Cited by:

    1. Ayako Kondo & Dongshu Ou, 2010. "In Search of a Better Life: The Occupational Attainment of Rural and Urban Migrants in China," ISER Discussion Paper 0793, Institute of Social and Economic Research, Osaka University.
    2. Fleisher, Belton M. & Wang, Xiaojun, 2003. "Potential residual and relative wages in Chinese township and village enterprises," Journal of Comparative Economics, Elsevier, vol. 31(3), pages 429-443, September.
    3. Yuming Fu & Stuart A. Gabriel, 2001. "Transistions to Private Employment: Earnings Determination, Worker Employment Preferences, and Job Turnover in Urban China," Working Paper 8636, USC Lusk Center for Real Estate.
    4. Zhang, Yin-Fang & Parker, David, 2002. "Labour and Total Factor Productivity in the Chinese Electronics Industry in the 1990s," Centre on Regulation and Competition (CRC) Working papers 30628, University of Manchester, Institute for Development Policy and Management (IDPM).
    5. Fleisher, Belton M. & Wang, Xiaojun, 2004. "Skill differentials, return to schooling, and market segmentation in a transition economy: the case of Mainland China," Journal of Development Economics, Elsevier, vol. 73(1), pages 315-328, February.
    6. Fleisher, Belton M. & Hu, Yifan & Li, Haizheng & Kim, Seonghoon, 2011. "Economic transition, higher education and worker productivity in China," Journal of Development Economics, Elsevier, vol. 94(1), pages 86-94, January.

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    JEL classification:

    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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