Qingjie Xia

Labor retrenchment in China: Determinants and consequences

The recent policy of labour retrenchment in state-owned enterprises in China (known as xia gang) has important implications for both efficiency and equity. This paper examines the individual-level determinants and consequences of the xia gang policy, using a survey conducted in the year 2000. As many as 11% of urban workers had been retrenched, and 53% of these remained unemployed. The risk of retrenchment was higher for women, the less educated, the low skilled, the middle-aged, and those employed by local government or urban collectives. Reemployment rates are low and imply that unemployment will be long-term. The duration of unemployment is longer for the unhealthy, the less educated, and women with young children. Unemployment benefit has no effect on the duration of unemployment. The income losses from retrenchment stem largely from the loss of earnings while unemployed. However, reemployed workers are paid less than if they were never retrenched. D 2002 Elsevier Science Inc. All rights reserved.

Contrasting paradigms: segmentation and competitiveness in the formation of the chinese labour market

An urban labour market is in the process of being formed in China. The objective of this paper is to analyse the stage that it has reached. A 1999 household survey is used to investigate whether the labour market has three tiers comprised of recently retrenched and re-employed urban workers, non-retrenched urban workers, and rural–urban migrants. It tests whether wage levels and structures differ across these categories of worker. Panel data are used to model the evolution of the wage structure and, specifically, the impact of retrenchment and re-employment. The results indicate that non-retrenched urban workers enjoy a wage premium, although migrants receive similar returns to education. Re-employed workers receive no return to education and appear to have lost out on the wage rises enjoyed by the non-retrenched. There is evidence to suggest that the urban labour market is segmented into these categories, which differ in their openness to market competition. The urban labour market has a long way to go before it is fully competitive.

The Economics of Communist Party Membership : The Curious Case of Rising Numbers and Wage Premium during China's Transition

Abstract As the Chinese Communist Party has loosened its grip in a more market-oriented economy, why have membership and the economic benefits of joining risen? We use three national household surveys over 11 years to answer this question for wages in urban China. Individual demand for Party membership is treated as an investment in ‘political capital’ that brings monetary rewards in terms of a wage premium that has risen in recent years. However, this does not explain why the wage premium is higher for the personal characteristics that reduce the probability of membership. Rationing with a scarcity value for members with those characteristics provides an explanation.

The Effects of the State Sector on Wage Inequality in Urban China: 1988–2007

This paper examines the effect of the public sector and state-owned enterprises (SOEs) on wage inequality in urban China using China Household Income Project data. It applies quantile regression analysis, the Machado and Mata decomposition to investigate how urban wage inequality was affected by the changes in wage structure and employment shares of the public sector and SOEs. We find that since the radical state sector reforms designed to reduce overstaffing and improve efficiency in the late 1990s, urban wage gaps were narrowed due to the reduction in the employment share of the state sector; the wage premium of the state sector in comparison with the non-state sector increased significantly; and changes in the wage structure of the labour market caused the rise in urban wage inequality.

The Determinants of Labour-time Allocation between Farm and Off-farm Work in Rural China: the Case of Liaoning Province

This article examines the determinants of the allocation process of labour time between farm and off-farm activities (OFAs) in north-east rural China during the late 1990s. The question is addressed by means of a dedicated fieldwork survey of 450 rural households in a clustering of nine villages in Xinmin County located in Liaoning Province. The econometric methodology consists of deploying a multinomial logit model to track the distribution of OFA employment opportunities. Our results reveal that market forces, rather than overt political connections, are assuming increasing significance, especially for those operating own-account enterprises (OAEs); that birthplace and location remain potent determinants of work destination and earnings capacity; and that being male and single motivates rural inhabitants to seek OFAs to a much greater extent than other household members. These findings have implications for those responsible for framing policy. In particular, a further round of liberalization to favour OFAs is suggested.