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Informal Employment in China: Trends, Patterns and Determinants of Entry

Author

Listed:
  • Liang, Zhe

    () (University of Nottingham)

  • Appleton, Simon

    () (University of Nottingham)

  • Song, Lina

    () (University of Nottingham)

Abstract

We empirically deconstruct informal employment in China into private business owners and casual workers without job contracts. Survey data from 2007 and 2013 document a rise in informal employment to the point where it exceeds formal employment, potentially an unintended consequence of the 2008 New Labour Contract Law. Compared with formal employees and business owners, casual workers report the lowest monetary and subjective wellbeing although business owners work longer hours with less social protection. Descriptive statistics and multivariate modelling reveal formal employees tend to have more favoured characteristics, often being educated, male, healthy and able bodied. Casual workers are more likely to have the characteristics of vulnerable groups, so the growth of casual employment is particularly concerning. There are indications that running small business is not always a sign of vulnerability and it may provide job flexibility for those with dependents to care for.

Suggested Citation

  • Liang, Zhe & Appleton, Simon & Song, Lina, 2016. "Informal Employment in China: Trends, Patterns and Determinants of Entry," IZA Discussion Papers 10139, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp10139
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    References listed on IDEAS

    as
    1. Long, Wenjin & Appleton, Simon & Song, Lina, 2013. "Job Contact Networks and Wages of Rural-Urban Migrants in China," IZA Discussion Papers 7577, Institute of Labor Economics (IZA).
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    Cited by:

    1. Mitra, Devashish, 2019. "Responses to Trade Opening: Evidence and Lessons from Asia," ADBI Working Papers 913, Asian Development Bank Institute.
    2. Mayneris, Florian & Poncet, Sandra & Zhang, Tao, 2018. "Improving or disappearing: Firm-level adjustments to minimum wages in China," Journal of Development Economics, Elsevier, vol. 135(C), pages 20-42.
    3. repec:spr:ijlaec:v:60:y:2017:i:2:d:10.1007_s41027-017-0096-x is not listed on IDEAS
    4. Devashish Mitra, 2019. "Responses to Trade Opening: Evidence and Lessons from Asia," Working Papers id:12977, eSocialSciences.

    More about this item

    Keywords

    informal employment; determinants; human capital; China;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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