| Abstract: |
China’s emerging labor market was buffeted by changes in demand and supply and
institutional changes in the last two decades. Using the Chinese Urban
Household Survey data from 1989 to 2009, our study shows that the market
responded with substantial changes in the structure of wages and in employment
and types of jobs that workers obtained that mirrors the adjustments found in
labor markets in advanced economies. However, the one place where the Chinese
labor market appears to diverge from the labor markets in advanced countries
is the rapid convergence in earnings and occupational positions of cohorts who
entered the job market under more or less favorable conditions. On this
dimension, China’s labor market seems more flexible than those in other
countries. Three related factors may explain this pattern: (1) the rapid
growth of China’s economy; (2) the high rate of employee turnover; (3) the
relative weakness of internal labor markets in China. Bottom line, the Chinese
labor market has responded about as well as one could expect to the changes in
the demand and supply factors and institutional shocks in this critical period
in Chinese economic history. |