Weathering a Storm: Survey-Based Perspectives on Employment in China in the Aftermath of the Global Financial Crisis (original) (raw)

The limited job prospects of displaced workers: evidence from two cities in China

Economic Change and Restructuring, 2008

The economic restructuring in China over the past decade has resulted in displacement of millions of workers who had been employed in the state sector. This has posed tremendous challenges economically, socially, politically, and culturally. For several years, Chinese policies attempted to cushion the shock by requiring state-owned enterprises to provide living allowances and reemployment services to workers that had been displaced. There have been relatively few empirical studies that have tracked the experiences of these displaced or xiagang workers. This study uses survey data from two large industrial cities to analyze the labor market situation of over 2,000 workers two years after they had been observed as displaced and unemployed. The findings point to the high rates of labor force withdrawal of xiagang workers and the relatively low proportion who find another wage job in the formal sector. It also documents the large number of workers who find work in the informal sector which seems to act as an important safety net. Not surprisingly, education is an important determinant of postlayoff labor market outcomes. Active labor market interventions do not seem to make a substantial difference although there is some evidence from the duration analyses that training does help workers find employment more quickly than they would have otherwise. JEL Classification: J200, J210, J230, J240, J630, J640 Keywords: Displacements, determinants of activity and labor market status, formal employment and self-employment, unemployment duration, China.

Unemployment, Underemployment, and Employment Policy in China's Cities

Modern China, 1992

Compared with other large and populous developing nations, China shows little sign of large-scale urban unemployment. There are two main reasons for thisa long-standing policy of actively discouraging rural-urban migration and the allocation of new urban labor force entrants to permanent positions in state or collective enterprises. The former policy limits the supply of urban workers below what it would be in the absence of restrictions on labor mobility, and the practice of job assignment limits the incidence of unemployment among designated urban residents. Furthermore, the small numbers of unemployed workers in Chinese cities consist largely of recent graduates, many of whom willingly pursue extended job searches in the hope of finding attractive positions. Even though urban unemployment is a small fraction of the labor force and is partly voluntary in nature, it would be a mistake to conclude that unemployment and policies intended to prevent unemployment can be excluded from consideration as factors that crucially affect the outcome of China's reform efforts. China's very success in avoiding urban unemployment is partly responsible for important AUTHORS' NOTE: This article summarizes a longer report prepared for the Asia Country III (AS3) Department of the World Bank The views expressed here are those of the authors alone. The authors gratefully acknowledge the able assistance of Bing Li and suggestions from Mete Durdag, Todd M. Johnson, Louis Putterman, Tejaswi Raparla, two referees, and various stafj'' members of the World Bank.

The Other Side of China's Economic Miracle: Unemployment and Inequality (1997)

1997

By Róbinson Rojas Sandford. "Since the counter-revolution took over in China in 1977, two main problems have been mounting: increasing unemployment and income differentiation. In September 1995, Far Eastern Economic Review published the following: "RURAL JOBLESS THREAT. Rural unemployment poses the "biggest threat" to China, which must expand labour-intensive industries, according to a State Statistics Bureau Report. "Labour supply will continue to outweigh demand for a long time", the report said. It called China's official estimates of 100 million rural jobless inaccurate. Unofficial tallies put the number at 200 million -nearly 17% of the population". In October 1995, Li Boyong, Chinese Minister of Labour, said that "the problem of oversupply of labour will remain for a long time, a fact which exerts considerable pressure on reform and development", see BOXES 3 and 4. "

Recent Developments in China's Labour Economy

SSRN Electronic Journal, 2003

change was notable in many areas, including a continuing decline in the importance of agriculhre, the emergence of new growth poles in electronics, telecommunications, and finance, continued increase in the scale and sophistication of foreign investment and export-oriented manufacturing, and rapid expansion of income inequality. A combination of govemment policy and decenftalized initiatives generated major shifts in the institutional structure of China's economy. Although the late 1990s brought important changes that expanded the central govemment's capacity to control the economy, the scope and power of market forces undoubtedly achieved broad gains during the l990s.t Issues of employment and unemployment, labour compensation, wage differentials, working conditions, migration, job mobility, and employment security figured prominently in all of these developments. At times, changes in the labour arena appeared to drive developments elsewhere. On other occasions, shifts on the labour scene came in response to changes in other segments of the economy. This report reviews Chinese labour market developments since 1990. Its objective is to review major shifts, to highlight important interactions between labour and other aspects of China's dynamic economy, and to indicate the likely path of trends in the determination of employment and wages. To do this, we focus successively on demographics, employment, unemployment, migration, productivity, wages, and distribution, and conclude with speculation about possible policy responses to China's growing problem of excess labour supply. Readers should be aware of difficulties surrounding the data underlying the following analysis of Chinese labour issues. In addition to the general cautions applicable to any large, lowincome nation with a large farm sector, several specific issues merit attention:2 ' These items are pursued in Rawski 2000a;Rawski 2001b. levels" (Meng 1999, p.78). Premier Zhu Rongii complained in Mar. 2000 that "falsification and exaggeration are rampant" (Nation 2000). Available evidence suggests near-zero growth in 1998 and 1999. This author shares the views of "many economists [who] say the country's real economic growth rate is, at most, half of that reported" (Smith 2001). (For details, see Rawski 2001a; Rawski 2001c; Rawski 2001d). Working paper No. 11

Unemployment in Urban China: an Analysis of Survey Data from Shanghai

Labour, 1993

We analyse the unemployment problem in the largest Chinese city, Shanghai, based on a survey of the unemployed conducted in late 1989. We find, as expected, that unemployment is particularly serious among school-leavers and contract and temporary workers, but also find a surprisingly high incidence of unemployment amongst permanent state employees and relatively long unemployment durations. The Shanghai unemployed rely heavily on occasional work for support, and only a small proportion receive state benefit. We identify problems of interpretation stemming from the stocksampling nature of the survey, and use non-parametric methods to reveal an underlying strong downward movement in individual re-employment probabilities.

The Chinese Labor Market in the Reform Era

2008

Since economic reforms began in 1978, the Chinese labor market has undergone a set of remarkable transformations that have dramatically affected the working lives and welfare of China's citizens. Like other rapidly growing developing countries, China has experienced rapid structural change featuring a steady flow of labor from agriculture to industry, and from rural areas to urban areas. As a transition economy, China has shifted gradually from planned allocation of labor in state-sector jobs to a more open labor market with increasing numbers of workers employed in the non-state and private sectors. Table 6.1 summarizes the magnitude of these changes, drawing upon official data. From 1978 to 2005, the share of labor employed primarily in agriculture fell from 71 percent to 45 percent, the share of labor working in urban areas increased from 24 percent to 36 percent, and the share of urban labor working in the state-owned or government sectors fell from 78 percent to 24 percent. [Table 6.1 about here] Although the large magnitudes of these changes are impressive, reform of the labor market has been halting, uneven, and difficult, with much additional reform required if China is to complete her transition successfully while maintaining her rapid development trajectory. Many of the challenges of labor market reforms relate to the