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1 |
ID:
181618
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Summary/Abstract |
Since the implementation of the Labor Contract Law (LCL) in 2010, a significant increase in the capital/labor ratio, known as capital deepening, has occurred in private firms in China. However, the cause and impact of the capital deepening is still in question, as either technological change or a higher cost of labor might cause it. Using data from the Chinese Private Enterprise Survey in 2008 and 2012, two critical findings are reported in this study. First, pension coverage significantly affected the capital/labor ratio in private firms after 2010. Second, large private firms are able to generate higher total factor productivity after the implementation of the LCL because they can adjust their production function more easily than smaller competitors. These findings have policy implications for reforms in the Chinese labor market.
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2 |
ID:
187847
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Summary/Abstract |
Employment-protection legislation (EPL) is known to reduce the unemployment risk of workers and employees and implicitly raises the costs of labor as a factor of production, in particular, the adjustment costs for that factor. Using firm-level accounting data and matched transaction-level trade data, the paper documents that firms responded to the inception of a new labor contract law as accepted by the National People's Congress of China in mid-2007 not only by adjusting their labor demand but also in terms of other adjustments: they raised the capital intensity of production and increased the quality of their output. The paper provides evidence that such changes and adjustments were particularly strong for firms in ex ante labor-intensive sectors and for private firms which were less shielded from adverse competitive effects than state-owned ones.
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3 |
ID:
139484
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Summary/Abstract |
This study analyzes the impact of spiralling growth in usage of contractual labour, in the context of stringent pro-worker labour regulations, on industrial labour productivity and employment generation. We obtain a quantitative measure of ‘stringency of labour regulations’ by applying majority rule on three different measures used in the literature. The results show that average labour productivity increases with the increase in the ratio of permanent workers to contractual workers, unless the industries are not operating in states having rigid/pro-worker labour regulations—which implies a negative impact of contractualization on labour productivity. Besides, the results show that the rigid/pro-worker labour regulations have negative impact on employment generation; it is especially discernible in labour-intensive industries.
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