China's 2008 Labor Contract Law: Implementation and Implications for China's Workers

53 Pages Posted: 31 Aug 2013

See all articles by Mary Elizabeth Gallagher

Mary Elizabeth Gallagher

University of Michigan at Ann Arbor - Department of Political Science

John Giles

World Bank; IZA Institute of Labor Economics; World Bank - Development Research Group (DECRG)

Albert Park

University of Michigan at Ann Arbor - The William Davidson Institute; Harvard University - Fairbank Center for East Asian Research

Meiyan Wang

Chinese Academy of Social Sciences (CASS)

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Abstract

This paper presents empirical evidence from household and firm survey data collected during 2009-2010 on the implementation of the 2008 Labor Contract Law and its effects on China's workers. The government and local labor bureaus have made substantial efforts to enforce the provisions of the new law, which has likely contributed to reversing a trend toward increasing informalization of the urban labor market. Enforcement of the law, however, varies substantially across cities. The paper analyzes the determinants of worker satisfaction with the enforcement of the law, the propensity of workers to have a labor contract, workers' awareness of the content of the law, and their likelihood of initiating disputes.The paper finds that all of these factors are highly correlated with the level of education, especially for migrants. Although higher labor costs may have had a negative impact on manufacturing employment growth, this has not led to an overall increase in aggregate unemployment or prevented the rapid growth of real wages. Less progress has been made in increasing social insurance coverage, although signing a labor contract is more likely to be associated with participation in social insurance programs than in the past, particularly for migrant workers.

Keywords: social insurance, informal sector, labor regulations, migration, gender, China

JEL Classification: J08, J16, J28, J41, J52, J53, O15, O17

Suggested Citation

Gallagher, Mary Elizabeth and Giles, John and Park, Albert Francis and Wang, Meiyan, China's 2008 Labor Contract Law: Implementation and Implications for China's Workers. IZA Discussion Paper No. 7555, Available at SSRN: https://ssrn.com/abstract=2318736

Mary Elizabeth Gallagher (Contact Author)

University of Michigan at Ann Arbor - Department of Political Science ( email )

Ann Arbor, MI 48109
United States

John Giles

World Bank ( email )

Washington DC
United States

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Albert Francis Park

University of Michigan at Ann Arbor - The William Davidson Institute ( email )

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

Harvard University - Fairbank Center for East Asian Research

1737 Cambridge Street
Coolidge Hall 308
Cambridge, MA 02138

Meiyan Wang

Chinese Academy of Social Sciences (CASS) ( email )

Institute of Population and Labor Economics
Beijing 100732
China

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