Labour Market Informality and Economic Transition: Employment Regulation and Adjustment to Economic Crisis in China
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This proposal outlines a research plan to increase understanding of labour market informality in China, with particular emphasis on the role of informality in adjustments to large economic shocks and the impact of labor regulation on informal employment. The case for studying the informal labor market in China is compelling. By nearly any measure, China is the world’s largest transition economy and the world’s largest developing country. Its remarkable development record over the past three decades of reform has increasingly made it a model for other developing and transition economies, especially in Africa. China stands at a critical moment in her economic transition, with the role of the informal sector featuring prominently in debates over the future direction of China’s labour market development. The forces at work in China are similar to those in many other transition and developing countries but are operating with magnified speed and momentum, so that improved understanding of informality in China may provide key lessons and insights for other countries. These forces include rapid informalization of the urban labor market due to the decline of the state sector and limited success in establishing effective new social insurance programs; rapid structural change and urbanization accompanied by large-scale internal migration of rural labor to urban areas; and passage of ambitious new labor regulations designed to protect workers from unfair treatment and provide them with greater economic security. On top of all this, the ongoing global economic crisis has put tremendous pressure on the system to respond and adjust to an unforeseen sharp drop in labor demand driven mainly by significant reductions in exports. The crisis provides an unusual opportunity to study how firms and government respond to adversity and what it means for workers and their families, and for structural adjustment, economic growth, and poverty.
JOUR
Cai, Fang
Park, Albert
2009
1470