The effects of wage distortions on the transition:: Theory and evidence from China
Before the reforms, the Chinese government had strong distributional objectives, which it pursued mainly by direct controls over state enterprise wage rates and hiring decisions. During the reform period, similar controls over state enterprises continued, but use of them had to re ect competition with the new nonstate sector that was mostly free from these controls. Based on these distributional considerations alone, we can explain: 1) a decline in the skills of workers in the state sector as the most able workers leave, 2) higher productivity in the nonstate sector, which consists of the most able workers, 3) accounting losses in the state sector, re ecting the transfer of tax revenue to nance higher wage payments to the unskilled, and 4) restructuring within the state sector, to reduce the distortions to relative wage rates. Many of these attributes are shared with other types of transition process.
(This abstract was borrowed from another version of this item.)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Roland, G., 1992.
"The Political Economy of Restructuring and Privatization in Eastern Europe,"
9218, Universite Libre de Bruxelles - C.E.M.E..
- Roland, Gerard, 1993. "The political economy of restructuring and privatization in Eastern Europe," European Economic Review, Elsevier, vol. 37(2-3), pages 533-540, April.
- Blanchard, Olivier Jean & Aghion, Philippe, 1994.
"On the Speed of Transition in Central Europe,"
4481322, Harvard University Department of Economics.
- Philippe Aghion & Olivier Jean Blanchard, 1994. "On the Speed of Transition Central Europe," NBER Working Papers 4736, National Bureau of Economic Research, Inc.
- Sachs, J.D. & Woo, W.T., 1994. "Structural Factors in the Economic Reforms of China, Eastern Europe and the Former Soviet Union," Papers 94-01, California Davis - Institute of Governmental Affairs.
When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:43:y:1999:i:1:p:163-183. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.