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Wage Reform, Soft Budget Constraints and Competition

Author

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  • Jian Sun

Abstract

Since the beginning of the Chinese economic reforms in 1978, there has been a series of effort to reform the labour compensation practice in state- owned enterprises to strengthen the link between pay and productivity. Despite the reforms, however, rapid increases in wage rates occurred in state-owned enterprises. Moreover, although state-owned enterprises have much lower productivity gains than non-state enterprises, they pay substantially higher wages and have faster wage growth. This paper studies the effects of institutional factors on labour compensation in state-owned enterprises.

Suggested Citation

  • Jian Sun, 1999. "Wage Reform, Soft Budget Constraints and Competition," WIDER Working Paper Series wp-1999-156, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-1999-156
    as

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