China's Labor Market Performance and Challenges

November 1, 2003

Preview Citation

Format: Chicago

Tao Ran, and R. Brooks China's Labor Market Performance and Challenges, (USA: International Monetary Fund, 2003) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

A more market-oriented labor market has emerged in China in the past twenty years with growing importance of the urban private sector, as state-owned enterprises have downsized. Despite the progress on reforms, a sizable surplus of labor still exists in the rural sector and state-owned enterprises. The main challenge facing China’s labor market in coming years is to absorb the surplus labor into quality jobs while adjusting to World Trade Organization (WTO) accession. This paper estimates that if annual GDP growth averages 7 percent and the employment elasticity is one-half, urban unemployment could double to about 10 percent over the next three to four years. These pressures would be limited by stronger economic growth, especially in the private sector and more labor-intensive service industries which have generated the most jobs in recent years. Therefore, policy should focus on encouraging private sector development while reducing barriers to labor mobility, improving worker skills, upgrading job search services, and strengthening the social safety net.

Subject: Employment, Labor, Labor force, Labor markets, Unemployment

Keywords: Asia and Pacific, China, China labor market yearbook, Employment, Employment elasticity, Government policy, Job growth, Labor force, Labor force, Labor markets, Search assistance, SOE job loss, Surplus labor, Unemployment, WP

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/210
Stock No:

WPIEA2102003
ISBN:

9781451874815
ISSN:

1018-5941

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