Search

Based on urban household survey data, the authors find that skill premia increased significantly across all regions of China between 1995 and 2002, but only in coastal regions between 2002 and 2007. By then, these regions also displayed much wider wage inequality and thus contributed more to overall urban wage inequality than non-coastal regions. While privatization was the main driver of skill premia in 1995-2002, China's (regionally uneven) integration into the global economy became the dominant influence in 2002-07. Reducing skill premia and inequality, the authors argue, calls for reform of the Hukou registration system which impedes skilled labour mobility and possibly also growth. [ABSTRACT FROM AUTHOR]

Since 2004, the massive flow of surplus rural labour in China has dried up; indeed, the country's eastern coastal region is currently experiencing a 'labour shortage'. This phenomenon, which is bound up with China's ongoing economic and social development, has arisen because migrant workers have little or no social security in China. Rather than a labour shortage, there is in fact still a huge rural labour surplus. If the system governing migrant workers' social security and labour rights were improved, this could ease the apparent labour shortage and solve firms' employment problems, thereby increasing productivity and supporting China's long-term economic growth. [ABSTRACT FROM AUTHOR]

. After 'opening up' in 1978, China followed a development strategy that has led to internal and external economic imbalances, especially since its labour market reform of the mid-1990s and the resulting surge in rural-to-urban migration. Low labour costs emerged as its main comparative advantage, but its over-reliance on exports for growth was starkly exposed by the global economic crisis of 2008. This, coupled with widening income disparities, could jeopardize the sustainability of China's growth unless it adjusts its reform and development strategies to promote income equality and domestic consumption. The Employment Contract Law in force since 2008 could signal institutional change in the right direction. [ABSTRACT FROM AUTHOR]