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ID: 110506

Labor market developments in China: a neoclassical view / Suqin Ge; Yang, Dennis Tao

Yang, Dennis Tao	Journal Article
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2011.

Summary/Abstract

This paper assesses the applicability of two alternative theories in understanding labor market developments in China: the classical view featuring a Lewis turning point in wage growth versus a neoclassical framework emphasizing rational choices of individuals and equilibrating forces of the market. Empirical evidence based on multiple data sources fails to validate the arrival of the Lewis turning point in China, showing continuous and coordinated wage growth across rural and urban sectors instead. Consistent with the neoclassical view, we find that rural workers expanded off-farm work when mobility restrictions were lifted, interprovincial migration responded to expected earnings and local employment conditions, and returns to education converged gradually to the international standard. These findings suggest major progresses in the integration of labor markets in China.

Key Words

China ; Labor markets ; Rural - Urban Migration ; Lewis Turning Point ; Wage Growth ; Rural – Urban Migration

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ID: 137539

Labor market effect of foreign acquisitions: evidence from Chinese manufacturing firms / Liu, Qing; Lu, Ruosi ; Zhang, Chao

Zhang, Chao	Article
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Summary/Abstract

The potential impacts of foreign acquisitions have long been debatable in both academic and policy circles in China, which have more or less shaped China's regulation policy regarding foreign acquisitions. This paper examines the causal effect of foreign acquisitions on the labor market in China with self-constructed firm level panel data. We combine the propensity score matching and the difference-in-differences techniques in our estimation to deal with the potential selection biases in acquisitions. Our results show that the impacts of foreign acquisitions in China are different from but also comparable to those in developed countries found in the literature. Specifically, foreign acquisitions have significant positive effects on the levels of wage and employment of target firms, but mildly negative impact on employment growth and insignificant impact on wage growth. The impacts show heterogeneities. We also check the potential channels of the impacts.

Key Words

China ; Labour market ; Chinese Economy ; Employment Growth ; Wage Growth ; Regulation Policy – China ;
Foreign Acquisitions

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