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The development of urban labour markets: China's urban wage curve, 1980-92

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  • Lora Sabin

Abstract

This study explores the effect of China's economic reforms and growth on a critical outcome of labour market interactions: wage levels. Provincial data from 1980 to 1992 are used to analyse changes in interregional wage differentiation, and the relationship between average and real wages and a variety of economic variables. The results illuminate the increasing role of market forces, particularly labour demand variables such as economic growth and foreign investment, in determining wage levels and explaining the pattern of first declining, and then sharply rising, interregional wage differentials in the 1980s and early 1990s. At the same time, the empirical results highlight the persistence of barriers to labour mobility across regions and enterprises of different ownership types. These findings suggest that the evolution of China's urban labour market to date is marked by a combination of unprecedented flexibility as well as old and new forms of rigidity.

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  • Lora Sabin, 1999. "The development of urban labour markets: China's urban wage curve, 1980-92," Journal of Development Studies, Taylor & Francis Journals, vol. 35(3), pages 134-152.
    • Handle: RePEc:taf:jdevst:v:35:y:1999:i:3:p:134-152
    DOI: 10.1080/00220389908422576
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    References listed on IDEAS

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    1. David Card & Richard B. Freeman, 1993. "Introduction to "Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States"," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 1-20, National Bureau of Economic Research, Inc.
    2. David Card & Richard B. Freeman, 1993. "Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States," NBER Books, National Bureau of Economic Research, Inc, number card93-1.
    3. George J. Borjas & Richard B. Freeman, 1992. "Immigration and the Work Force: Economic Consequences for the United States and Source Areas," NBER Books, National Bureau of Economic Research, Inc, number borj92-1.
    4. repec:eee:labchp:v:1:y:1986:i:c:p:525-602 is not listed on IDEAS
    5. Randall W. Eberts & Joe A. Stone, 1992. "Wage and Employment Adjustment in Local Labor Markets," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wea, November.
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    Cited by:

    1. Roberto Bande Ramudo & Melchor Fernández Fernández & Víctor Montuenga Gómez, 2011. "Wage flexibility and local labour markets: homogeneity of the wage curve in Spain," Documentos de trabajo - Analise Economica 0044, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
    2. Appleton, Simon & Song, Lina & Xia, Qingjie, 2005. "Has China crossed the river? The evolution of wage structure in urban China during reform and retrenchment," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 644-663, December.
    3. Pierre, Gaelle & Scarpetta, Stefano, 2004. "Employment regulations through the eyes of employers - do they matter and how do firms respond to them?," Policy Research Working Paper Series 3463, The World Bank.
    4. Kang, Lili & Peng, Fei, 2012. "Real wage cyclicality in urban China," Economics Letters, Elsevier, vol. 115(2), pages 141-143.
    5. Zhongmin Wu, 2004. "Wage curve for urban China: a panel data approach," Applied Economics Letters, Taylor & Francis Journals, vol. 11(7), pages 425-428.
    6. Richard B. Freeman, 2009. "Labor Regulations, Unions, and Social Protection in Developing Countries: Market distortions or Efficient Institutions?," NBER Working Papers 14789, National Bureau of Economic Research, Inc.
    7. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
    8. Lili Kang & Fei Peng, 2017. "Wage flexibility in the Chinese labour market, 1989–2009," Regional Studies, Taylor & Francis Journals, vol. 51(4), pages 616-628, April.
    9. Freeman, Richard B., 2010. "Labor Regulations, Unions, and Social Protection in Developing Countries," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4657-4702, Elsevier.
    10. Víctor M. Montuenga‐Gómez & José M. Ramos‐Parreño, 2005. "Reconciling the Wage Curve and the Phillips Curve," Journal of Economic Surveys, Wiley Blackwell, vol. 19(5), pages 735-765, December.

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