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Do Employees in the Public Sector Still Enjoy Earnings Advantages?

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  • Economics

Abstract

Microsoft Word - FINAL.1.FRONT MATTER...doc Paper Revised August, 2012 Do Employees in the Public Sector Still Enjoy Earnings Advantages? by YANG Juan, Sylvie Démurger and LI Shi Working Paper # 2011-18 October 2011 CIBC Working Paper Series Department of Economics Social Science Centre The University of Western Ontario London, Ontario, N6A 5C2 Canada This working paper is available as a downloadable pdf file on our website http://economics.uwo.ca/centres/cibc/ 559 NINE Do Employees in the Public Sector Still Enjoy Earnings Advantages? YANG Juan, Sylvie Démurger, and LI Shi 560 I. Introduction Three decades of economic reform have brought tremendous changes in every sector of the Chinese economy. The labor market is no exception, and it was particularly affected by important policy and institutional changes at the turn of the century. On the one hand, the state-sector reform was accelerated after the Chinese Communist Party’s September 1997 Fifteenth National Congress, which encouraged both the corporatization of large state-owned enterprises (SOEs) and the restructuring of small SOEs. On the other hand, the Congress also recognized private enterprises as an important component of the economy and placed an emphasis on rule of law. As a direct consequence, the urban labor market was reshaped due to the unprecedented growth in unemployment and the reallocation of labor from the public to the private sector. At the same time, competition among workers in the urban labor market increased sharply due to the massive rural labor-force exodus, which led to an estimated 140 million rural workers in the cities by 2008. In the context of a transitional economy, these dramatic changes raise a number of issues about the direction of the urban labor market. A key aspect to be explored is

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