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How Does China's New Labour Contract Law Affect Floating Workers?

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  • Xiaoying Li
  • Richard B. Freeman

Abstract

China's new Labor Contract Law took effect on January 2008 and required firms to give migrant workers written contracts, strengthened labor protections for workers and contained penalties for firms that did not follow the labor code. This paper uses survey data of migrant workers in the Pearl River Delta before and after the law and a retrospective question on when workers received their first labor contract to assess the effects of the law on labor outcomes. The evidence shows that the new law increased the percentage of migrant workers with written contracts, which in turn raised social insurance coverage, reduced the likelihood of wage arrears, and raised the likelihood that the worker had a union at their workplace.
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Suggested Citation

  • Xiaoying Li & Richard B. Freeman, 2015. "How Does China's New Labour Contract Law Affect Floating Workers?," British Journal of Industrial Relations, London School of Economics, vol. 53(4), pages 711-735, December.
    • Handle: RePEc:bla:brjirl:v:53:y:2015:i:4:p:711-735
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    References listed on IDEAS

    as
    1. Chen, Yu-Fu & Funke, Michael, 2009. "China's new Labour Contract Law: No harm to employment?," China Economic Review, Elsevier, vol. 20(3), pages 558-572, September.
    2. Chen, Yu-Fu & Funke, Michael, 2008. "China´s new labour contract law: no harm to employment?," SIRE Discussion Papers 2008-51, Scottish Institute for Research in Economics (SIRE).
    3. Rebecca M. Blank, 1994. "Introduction to "Social Protection versus Economic Flexibility: Is There a Trade-Off?"," NBER Chapters, in: Social Protection versus Economic Flexibility: Is There a Trade-Off?, pages 1-20, National Bureau of Economic Research, Inc.
    4. Justin Yifu Lin, 1989. "An Economic Theory of Institutional Change: Induced and Imposed Change," Cato Journal, Cato Journal, Cato Institute, vol. 9(1), pages 1-33, Spring/Su.
    5. Rebecca M. Blank, 1994. "Social Protection versus Economic Flexibility: Is There a Trade-Off?," NBER Books, National Bureau of Economic Research, Inc, number blan94-1.
    6. Blau, Francine D. & Kahn, Lawrence M., 1999. "Institutions and laws in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 25, pages 1399-1461, Elsevier.
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    More about this item

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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