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Towards a Labour Market in China

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  • Knight, John
  • Song, Lina

Abstract

The Chinese transition from an administered labour and wage system towards a properly functioning labour market is examined. China has a labour surplus economy par excellence and its labour institutions--spreading and disguising unemployment--have to be viewed in that light. A contrast is drawn between 'insiders' and 'outsiders', the former state-employed urban residents and the latter the rapidly growing numbers of private-sector employees, rural-urban migrants, and rural industry workers. The operation of market forces outside the urban state sector is assessed. The egalitarian urban wage structure is analysed, and the effects of the urban reforms on wages and unemployment are examined. Urban labour-market reform has not proceeded very far. The case for and the obstacles to further reform are investigated: there are economic advantages but political impediments. The problem is systemic and requires reform in other areas as well, giving rise to issues of sequencing. Copyright 1995 by Oxford University Press.

Suggested Citation

  • 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.
  • Handle: RePEc:oup:oxford:v:11:y:1995:i:4:p:97-117
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    References listed on IDEAS

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    1. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 91-134.
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    Cited by:

    1. Démurger, Sylvie & Gurgand, Marc & Li, Shi & Yue, Ximing, 2009. "Migrants as second-class workers in urban China? A decomposition analysis," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 610-628, December.
    2. Zhao, Yaohui, 2001. "Foreign direct investment and relative wages: The case of China," China Economic Review, Elsevier, vol. 12(1), pages 40-57.
    3. Michele Bruni & Claudio Tabacchi, 2011. "Present and Future of the Chinese Labour Market," Center for the Analysis of Public Policies (CAPP) 0083, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    4. Knight, John & Deng, Quheng & Li, Shi, 2011. "The puzzle of migrant labour shortage and rural labour surplus in China," China Economic Review, Elsevier, vol. 22(4), pages 585-600.
    5. Démurger, Sylvie & Xu, Hui, 2011. "Return Migrants: The Rise of New Entrepreneurs in Rural China," World Development, Elsevier, vol. 39(10), pages 1847-1861.
    6. Zhang, Junsen & Zhao, Yaohui & Park, Albert & Song, Xiaoqing, 2005. "Economic returns to schooling in urban China, 1988 to 2001," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 730-752, December.
    7. Appleton, Simon & Song, Lina & Xia, Qingjie, 2010. "Growing out of Poverty: Trends and Patterns of Urban Poverty in China 1988-2002," World Development, Elsevier, vol. 38(5), pages 665-678, May.
    8. CHEN, Guifu & HAMORI, Shigeyuki, 2009. "Economic returns to schooling in urban China: OLS and the instrumental variables approach," China Economic Review, Elsevier, vol. 20(2), pages 143-152, June.
    9. Appleton, Simon & Song, Lina, 2008. "Life Satisfaction in Urban China: Components and Determinants," World Development, Elsevier, vol. 36(11), pages 2325-2340, November.
    10. Xiaobing Wang & Jenifer Piesse & Nick Weaver, 2011. "Mind the gaps: a political economy of the multiple dimensions of China’s rural–urban divide," Brooks World Poverty Institute Working Paper Series 15211, BWPI, The University of Manchester.
    11. Knight, John, 2007. "China, South Africa, and the Lewis Model," WIDER Working Paper Series 082, World Institute for Development Economic Research (UNU-WIDER).
    12. John Knight & Li Shi & Deng Quheng, 2008. "Education and the Poverty Trap in Rural China," CSAE Working Paper Series 2008-02, Centre for the Study of African Economies, University of Oxford.
    13. John Knight & Li Shi & Deng Quheng, 2008. "The Curious Case of Son Preference and Household Income in Rural China," CSAE Working Paper Series 2008-03, Centre for the Study of African Economies, University of Oxford.
    14. Knight, John & Yueh, Linda, 2004. "Job mobility of residents and migrants in urban China," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 637-660, December.
    15. Bagnai, Alberto, 2009. "The role of China in global external imbalances: Some further evidence," China Economic Review, Elsevier, vol. 20(3), pages 508-526, September.
    16. Lohmar, Bryan & Diao, Xinshen & Somwaru, Agapi & Tuan, Francis C. & Chan, Kitty Kay, 2003. "Softening the Impact of Adjustment to Reform: The China Experience," Policy Reform and Adjustment Workshop, October 23-25, 2003, Imperial College London, Wye Campus 15733, International Agricultural Policy Reform and Adjustment Project (IAPRAP).
    17. Knight, John & Li, Shi, 2006. "Unemployment duration and earnings of re-employed workers in urban China," China Economic Review, Elsevier, vol. 17(2), pages 103-119.
    18. Peng, Kelly Z. & Ngo, Hang-Yue & Shi, Junqi & Wong, Chi-Sum, 2009. "Gender differences in the work commitment of Chinese workers: An investigation of two alternative explanations," Journal of World Business, Elsevier, vol. 44(3), pages 323-335, July.
    19. Ding, Sai & Knight, John, 2009. "Can the augmented Solow model explain China's remarkable economic growth? A cross-country panel data analysis," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 432-452, September.
    20. Lohmar, Bryan & Rozelle, Scott & Zhao, Changbao, 2000. "The Rise Of Rural-To-Rural Labor Markets In China," Working Papers 11955, University of California, Davis, Department of Agricultural and Resource Economics.

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