IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp10139.html
   My bibliography  Save this paper

Informal Employment in China: Trends, Patterns and Determinants of Entry

Author

Listed:
  • Liang, Zhe

    (University of Nottingham)

  • Appleton, Simon

    (University of Nottingham)

  • Song, Lina

    (University of Nottingham)

Abstract

We empirically deconstruct informal employment in China into private business owners and casual workers without job contracts. Survey data from 2007 and 2013 document a rise in informal employment to the point where it exceeds formal employment, potentially an unintended consequence of the 2008 New Labour Contract Law. Compared with formal employees and business owners, casual workers report the lowest monetary and subjective wellbeing although business owners work longer hours with less social protection. Descriptive statistics and multivariate modelling reveal formal employees tend to have more favoured characteristics, often being educated, male, healthy and able bodied. Casual workers are more likely to have the characteristics of vulnerable groups, so the growth of casual employment is particularly concerning. There are indications that running small business is not always a sign of vulnerability and it may provide job flexibility for those with dependents to care for.

Suggested Citation

  • Liang, Zhe & Appleton, Simon & Song, Lina, 2016. "Informal Employment in China: Trends, Patterns and Determinants of Entry," IZA Discussion Papers 10139, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10139
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp10139.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Long, Wenjin & Appleton, Simon & Song, Lina, 2013. "Job Contact Networks and Wages of Rural-Urban Migrants in China," IZA Discussion Papers 7577, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Feicheng & Kis-Katos, Krisztina & Zhou, Minghai, 2020. "Trade Liberalization and the Gender Employment Gap in China," IZA Discussion Papers 13626, Institute of Labor Economics (IZA).
    2. Carl Shu-Ming Lin & Linxiang Ye & Wei Zhang, 2020. "Transforming informal work and livelihoods in China," WIDER Working Paper Series wp-2020-150, World Institute for Development Economic Research (UNU-WIDER).
    3. Wang, Feicheng & Liang, Zhe & Lehmann, Hartmut, 2021. "Import competition and informal employment: Empirical evidence from China," University of Göttingen Working Papers in Economics 426, University of Goettingen, Department of Economics.
    4. John Knight, 2021. "A Tale of Two Countries and Two Stages: South Africa, China and the Lewis Model," South African Journal of Economics, Economic Society of South Africa, vol. 89(2), pages 143-172, June.
    5. Joy Chen & Zijun Cheng & Robin Kaiji Gong & Jinlin Li, 2020. "Riding Out the COVID-19 Storm: How Government Policies Affect SMEs in China," HKUST CEP Working Papers Series 202006, HKUST Center for Economic Policy.
    6. Devashish Mitra, 2019. "Responses to Trade Opening: Evidence and Lessons from Asia," Working Papers id:12977, eSocialSciences.
    7. Mayneris, Florian & Poncet, Sandra & Zhang, Tao, 2018. "Improving or disappearing: Firm-level adjustments to minimum wages in China," Journal of Development Economics, Elsevier, vol. 135(C), pages 20-42.
    8. Rahul Menon, 2019. "Short-term contracts and their effect on wages in Indian regular wage employment," The Economic and Labour Relations Review, , vol. 30(1), pages 142-164, March.
    9. Rosa Abraham, 2017. "Informality in the Indian Labour Market: An Analysis of Forms and Determinants," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 60(2), pages 191-215, June.
    10. Chen, Joy & Cheng, Zijun & Gong, Robin Kaiji & Li, Jinlin, 2022. "Riding out the COVID-19 storm: How government policies affect SMEs in China," China Economic Review, Elsevier, vol. 75(C).
    11. Jian Ding & Yixiao Zhou, 2021. "Did the Labor Contract Law Affect the Capital Deepening and Efficiency of Chinese Private Firms?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(5), pages 105-126, September.
    12. Lahoti, Rahul & Abraham, Rosa & Swaminathan, Hema, 2023. "The imperatives of marriage, motherhood and employment: Evidence from a Life History Calendar," SocArXiv jud9r, Center for Open Science.
    13. Ying Chen & An Li, 2021. "Global Green New Deal: A Global South perspective," The Economic and Labour Relations Review, , vol. 32(2), pages 170-189, June.
    14. Yang Cai & Weiwei Kong & Yongsheng Lian & Xiangxin Jin, 2021. "Depressive Symptoms among Chinese Informal Employees in the Digital Era," IJERPH, MDPI, vol. 18(10), pages 1-13, May.
    15. Bargain, Olivier & Etienne, Audrey & Melly, Blaise, 2021. "Informal pay gaps in good and bad times: Evidence from Russia," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 693-714.
    16. Yu, Li & Ma, Tiemeng & Wu, Sirong & Lyu, Zhuoyang, 2023. "How does broadband internet affect firm-level labor misallocation: The role of information frictions," China Economic Review, Elsevier, vol. 82(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 岩﨑, 一郎 & Iwasaki, Ichiro & 馬, 欣欣 & Ma, Xin Xin, 2019. "現代中国における男女賃金格差: メタ分析による接近," Discussion Paper Series 689, Institute of Economic Research, Hitotsubashi University.
    2. Catia Batista & Ana Isabel Costa, 2016. "Assessing the role of social networks on migrant labor market outcomes: Evidence from a representative immigrant survey," FEUNL Working Paper Series novaf:wp1601, Universidade Nova de Lisboa, Faculdade de Economia.
    3. Fang, Tony & Gunderson, Morley & Lin, Carl, 2016. "The use and impact of job search procedures by migrant workers in China," China Economic Review, Elsevier, vol. 37(C), pages 154-165.
    4. Yuanyuan Chen & Le Wang & Min Zhang, 2018. "Informal search, bad search?: the effects of job search method on wages among rural migrants in urban China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(3), pages 837-876, July.
    5. LIU Yang, 2015. "The Role of Individual Social Capital in Wage Determination: Evidence from China," Discussion papers 15133, Research Institute of Economy, Trade and Industry (RIETI).
    6. Chen, Yuanyuan & Wang, Le & Zhang, Min, 2017. "Informal Search, Bad Search? The Effects of Job Search Method on Wages among Rural Migrants in Urban China," IZA Discussion Papers 11058, Institute of Labor Economics (IZA).
    7. Galanakis, Yannis, 2020. "Female Human Capital Mismatch: An extension for the British public sector," GLO Discussion Paper Series 669, Global Labor Organization (GLO).
    8. Ichiro Iwasaki & Xinxin Ma, 2020. "Gender wage gap in China: a large meta-analysis," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 54(1), pages 1-19, December.
    9. Temitayo A. Adeyemo & Victor O. Okoruwa, 2018. "Value Addition and Productivity Differentials in the Nigerian Cassava System," Sustainability, MDPI, vol. 10(12), pages 1-22, December.
    10. Xiong, Ailun & Li, Hongyi & Westlund, Hans & Pu, Yongjian, 2017. "Social networks, job satisfaction and job searching behavior in the Chinese labor market," China Economic Review, Elsevier, vol. 43(C), pages 1-15.
    11. Giulietti, Corrado & Wahba, Jackline & Zenou, Yves, 2018. "Strong versus weak ties in migration," European Economic Review, Elsevier, vol. 104(C), pages 111-137.
    12. Yao, Yao & Chen, George S. & Salim, Ruhul & Yu, Xiaojun, 2018. "Schooling returns for migrant workers in China: Estimations from the perspective of the institutional environment in a rural setting," China Economic Review, Elsevier, vol. 51(C), pages 240-256.
    13. Catia Batista & Ana Isabel Costa, 2016. "Assessing the role of social networks on migrant labor market outcomes: Evidence from a representative immigrant survey," NOVAFRICA Working Paper Series wp1601, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    14. Iwasaki, Ichiro & Ma, Xinxin, 2020. "Gender Wage Gap in China: A Large Meta-Analysis," CEI Research Paper Series 2020-5, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    15. Ha, Wei & Yi, Junjian & Yuan, Ye & Zhang, Junsen, 2016. "The dynamic effect of rural-to-urban migration on inequality in source villages: System GMM estimates from rural China," China Economic Review, Elsevier, vol. 37(C), pages 27-39.

    More about this item

    Keywords

    informal employment; determinants; human capital; China;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp10139. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.