IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Wage Flexibility in Chinese Labor Market 1989-2009

  • Peng, Fei
  • Kang, Lili

This paper analyses wage flexibility in Chinese labor market using the China Health and Nutrition Survey (CHNS) for the period 1989-2009. China has highly coordinated wage-setting institutions which might contribute to higher wage sensitivity of the coordinated workers, but lower sensitivity in the workers with coordination failures. Using micro-data matched to local unemployment rates, we find the reaction of wages to local unemployment varies significantly across different employee groups, suggesting disparate wage setting institutions within China. The highly coordinated big firms and public sector show more significant wage flexibility than the lagging small/medium firms and private sector. Workers with characteristics of weak bargaining power also have less flexible wages. The major wage flexibility occurred in the 1990s when the labor market moved from a centrally-planned system to a market-oriented system. After the public sector retrenchment, the labor market seems recover the rigidity in the 2000s. Moreover, sensitivity test using Heckman selection model really shows significant selectivity effects, but the Heckman adjusted results would not change our basic conclusions.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://mpra.ub.uni-muenchen.de/46651/1/MPRA_paper_46651.pdf
File Function: original version
Download Restriction: no

File URL: http://mpra.ub.uni-muenchen.de/46830/1/MPRA_paper_46830.pdf
File Function: revised version
Download Restriction: no

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 46651.

as
in new window

Length:
Date of creation: 10 Apr 2013
Date of revision:
Handle: RePEc:pra:mprapa:46651
Contact details of provider: Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de

More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Fei Peng & W. Stanley Siebert, 2008. "Real Wage Cyclicality in Italy," LABOUR, CEIS, vol. 22(4), pages 569-591, December.
  2. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, June.
  3. Wen Wang & Peter G. Moffatt, 2008. "Hukou and Graduates' Job Search in China ," Asian Economic Journal, East Asian Economic Association, vol. 22(1), pages 1-23, 03.
  4. Laurence Ball & David Romer, 1987. "Sticky Prices as Coordination Failure," NBER Working Papers 2327, National Bureau of Economic Research, Inc.
  5. Olivier Blanchard & Lawrence F. Katz, 1997. "What We Know and Do Not Know about the Natural Rate of Unemployment," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 51-72, Winter.
  6. Paul J. Devereux, 2001. "The Cyclicality of real wages within employer-employee matches," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(4), pages 835-850, July.
  7. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
  8. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
  9. Devereux, Paul J. & Hart, Robert A., 2005. "Real Wage Cyclicality of Job Stayers, Within-Company Job Movers, and Between-Company Job Movers," IZA Discussion Papers 1651, Institute for the Study of Labor (IZA).
  10. Gary Solon & Warren Whatley & Ann Huff Stevens, 1997. "Wage changes and intrafirm job mobility over the business cycle: Two case studies," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(3), pages 402-415, April.
  11. Zhongmin Wu, 2004. "Wage curve for urban China: a panel data approach," Applied Economics Letters, Taylor & Francis Journals, vol. 11(7), pages 425-428.
  12. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
  13. Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December.
  14. O'Mahony, Mary & Peng, Fei, 2009. "Skill bias, age and organizational change," MPRA Paper 38767, University Library of Munich, Germany.
  15. David Card, 1995. "The Wage Curve: A Review," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 285-299, June.
  16. Bils, Mark J, 1985. "Real Wages over the Business Cycle: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 666-89, August.
  17. James J. Heckman, 2001. "Micro Data, Heterogeneity, and the Evaluation of Public Policy: Nobel Lecture," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 673-748, August.
  18. Lixin Colin Xu & Tian Zhu & Yi-min Lin, 2005. "Politician control, agency problems and ownership reform," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(1), pages 1-24, 01.
  19. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 421-450, 07.
  20. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  21. Andreas Ammermuller & Claudio Lucifora & Federica Origo & Thomas Zwick, 2010. "Wage Flexibility in Regional Labour Markets: Evidence from Italy and Germany," Regional Studies, Taylor & Francis Journals, vol. 44(4), pages 401-421.
  22. Lili Kang & Fei Peng, 2012. "A selection analysis of returns to education in China," Post-Communist Economies, Taylor & Francis Journals, vol. 24(4), pages 535-554, March.
  23. Moore, Tomoe & Pentecost, Eric J., 2006. "An investigation into the sources of fluctuation in real and nominal wage rates in eight EU countries: A structural VAR approach," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 357-376, June.
  24. Shin, Donggyun, 1994. "Cyclicality of real wages among young men," Economics Letters, Elsevier, vol. 46(2), pages 137-142, October.
  25. Donggyun Shin & Gary Solon, 2006. "New Evidence on Real Wage Cyclicality within Employer-Employee Matches," NBER Working Papers 12262, National Bureau of Economic Research, Inc.
  26. Eric Pentecost & John Sessions, 2002. "Changing labour market flexibility in the European union," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(1), pages 148-160, March.
  27. Kang, Lili & Peng, Fei, 2012. "Real wage cyclicality in urban China," Economics Letters, Elsevier, vol. 115(2), pages 141-143.
  28. Lora Sabin, 1999. "The development of urban labour markets: China's urban wage curve, 1980-92," Journal of Development Studies, Taylor & Francis Journals, vol. 35(3), pages 134-152.
  29. Gary Solon & Robert Barsky & Jonathan A. Parker, 1992. "Measuring the Cyclicality of Real Wages: How Important is Composition Bias," NBER Working Papers 4202, National Bureau of Economic Research, Inc.
  30. repec:cup:cbooks:9780521771269 is not listed on IDEAS
  31. Meng, Xin & Shen, Kailing & Xue, Sen, 2013. "Economic reform, education expansion, and earnings inequality for urban males in China, 1988–2009," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 227-244.
  32. Meng, Xin & Kidd, Michael P., 1997. "Labor Market Reform and the Changing Structure of Wage Determination in China's State Sector during the 1980s," Journal of Comparative Economics, Elsevier, vol. 25(3), pages 403-421, December.
  33. Appleton, Simon & Song, Lina & Xia, Qingjie, 2005. "Has China crossed the river? The evolution of wage structure in urban China during reform and retrenchment," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 644-663, December.
  34. Peng, Fei & Siebert, W. Stanley, 2007. "Real Wage Cyclicality in Germany and the UK: New Results Using Panel Data," IZA Discussion Papers 2688, Institute for the Study of Labor (IZA).
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:46651. 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: (Ekkehart Schlicht)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.