38 Pages Posted: 8 Jan 2009
Date Written: December 30, 2008
In January 2008, China adopted a new labour contract law. This new law represents the most significant reform to the legislation on employment relations in mainland China in more than a decade. The paper provides a theoretical framework on the inter-linkages between labour market regulation, option value and the choice and timing of employment. All in all, the paper demonstrates that the Labour Contract Law in its own right will have only small impacts upon employment in the fast-growing Chinese economy. Rather, induced increasing unit labour costs represent the real issue and may reduce employment.
Keywords: China, labour contract law, real options, employment
JEL Classification: C61, D81, D92, J23
Suggested Citation: Suggested Citation
Funke, Michael and Chen, Yu-Fu, China's New Labour Contract Law: No Harm to Employment? (December 30, 2008). BOFIT Discussion Paper No. 29/2008. Available at SSRN: https://ssrn.com/abstract=1324592 or http://dx.doi.org/10.2139/ssrn.1324592