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On the Emergence of Labour Redundancy in China's State Industry: Findings from a 1980-1994 Data Panel


  • Xiao-yuan Dong

    (University of Winnipeg)

  • Louis Putterman

    (Brown University)


The need to lay off redundant employees emerged as an important policy issue in urban China in the 1990s. The degree of over-manning can be estimated by comparing estimates of the marginal product of labor with estimates of the full wage, including bonuses, subsidies, and non-cash benefits. We present estimates from a panel of 752 industrial SOEs for the years 1980-94. These estimates show a rising trend of redundancy with substantial differences among industries. They confirm both out earlier finding that over-manning was not general in the pre-reform era, and the prevailing view that it was a severe problem in the 1990s. Comparative Economic Studies (2001) 43, 111–128. doi:10.1057/ces.2001.10

Suggested Citation

  • Xiao-yuan Dong & Louis Putterman, 2001. "On the Emergence of Labour Redundancy in China's State Industry: Findings from a 1980-1994 Data Panel," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 43(2), pages 111-128, July.
  • Handle: RePEc:pal:compes:v:43:y:2001:i:2:p:111-128

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    References listed on IDEAS

    1. Nicholas Crafts, 1999. "East Asian Growth Before and After the Crisis," IMF Staff Papers, Palgrave Macmillan, vol. 46(2), pages 1-2.
    2. Cardoso, Eliana A., 1981. "Food supply and inflation," Journal of Development Economics, Elsevier, vol. 8(3), pages 269-284, June.
    3. Rattso, Jorn, 1989. "Macrodynamic adjustment mechanisms in a dual semi-industrialized economy," Journal of Development Economics, Elsevier, vol. 30(1), pages 47-69, January.
    4. Torsten M Sloek & Sanja Kalra, 1999. "Inflation and Growth in Transition; Are the Asian Economies Different?," IMF Working Papers 99/118, International Monetary Fund.
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    Cited by:

    1. Zheng, Jinghai & Liu, Xiaoxuan & Bigsten, Arne, 2003. "Efficiency, technical progress, and best practice in Chinese state enterprises (1980-1994)," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 134-152, March.
    2. Waikei R Lam & Xiaoguang Liu & Alfred Schipke, 2015. "China’s Labor Market in the “New Normal”," IMF Working Papers 15/151, International Monetary Fund.
    3. Frazier, Mark W., 2006. "State-sector shrinkage and workforce reduction in China," European Journal of Political Economy, Elsevier, vol. 22(2), pages 435-451, June.
    4. Dong, Xiao-Yuan & Putterman, Louis, 2003. "Soft budget constraints, social burdens, and labor redundancy in China's state industry," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 110-133, March.
    5. Pandey, Manish & Dong, Xiao-yuan, 2009. "Manufacturing productivity in China and India: The role of institutional changes," China Economic Review, Elsevier, vol. 20(4), pages 754-766, December.

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