Do Employees in the Public Sector Still Enjoy Earnings Advantages?

📖 The Scoop

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 importa nt 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, compe tition 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.

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