Labor market dynamics in urban China and the role of the state sector
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Officially Accepted for Publication


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AbstractThis paper studies the effect of state-owned enterprises (SOEs) on the dynamics of the Chinese urban labor market. Using longitudinally matched monthly panel data, we document very low labor force dynamics in the state sector, which leads to a high long-term unemployment rate. We develop and estimate an equilibrium search and matching model with three differences between the state and non-state sectors: labor productivity, labor adjustment cost, and workers’ bargaining power. Counterfactual analysis shows that, among the three channels, reducing the bargaining power of state sector workers is most effective in reducing unemployment duration and unemployment rate.
Acceptance Date08/04/2021
All Author(s) ListShuaizhang Feng, Naijia Guo
Country/Region of ConferenceChina
Journal nameJournal of Comparative Economics
Year2021
ISSN1095-7227
LanguagesEnglish-United States

Last updated on 2021-24-10 at 23:43