Labor Market Rigidities and Macroeconomic Performance in the PRC
Loading...
No Access Until
Permanent Link(s)
Collections
Other Titles
Authors
Abstract
It has often been assumed that there is a tradeoff between labor market flexibility and labor protection. Following the promulgation of the Labor Contract Law in 2008, employment protection in the People’s Republic of China (PRC) changed from less restrictive than the OECD average to more restrictive than any OECD economies with respect to indicators for severance pay and dismissals. However this change and its impact are not well recognized. Overall, labor market flexibility consists of two components. On the demand side, labor market flexibility affects employers’ decisions to hire workers. On the supply side, contrary to the common belief, improved workers’ protection could in fact also improve labor market flexibility through the labor supply. This is also rarely discussed, but could help the PRC reduce labor market rigidity. Based on a review of international experiences and the labor market situation in the PRC, this policy note provides policy recommendations on increasing macroeconomic efficiency through improving labor market flexibility without necessarily sacrificing protection for workers. In addition to strengthening job creation, supply-side government policies, such as those to help workers moderate income fluctuations (both cyclical and structural) and improve workers mobility, could help restore labor market flexibility in the PRC.
Journal / Series
Volume & Issue
Description
Sponsorship
Date Issued
2016-01-01
Publisher
Keywords
China; labor market; flexibility; labor protection; severance pay; dismissal
Location
Effective Date
Expiration Date
Sector
Employer
Union
Union Local
NAICS
Number of Workers
Committee Chair
Committee Co-Chair
Committee Member
Degree Discipline
Degree Name
Degree Level
Related Version
Related DOI
Related To
Related Part
Based on Related Item
Has Other Format(s)
Part of Related Item
Related To
Related Publication(s)
Link(s) to Related Publication(s)
References
Link(s) to Reference(s)
Previously Published As
Government Document
ISBN
ISMN
ISSN
Other Identifiers
Rights
Required Publisher Statement: © Asian Development Back. Available at ADB’s Open Access Repository under a Creative Commons Attribution license (CC BY 3.0 IGO).
Types
article