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Discussion Paper Details

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Title: Economic Transition and Private-Sector Labor Demand: Evidence from Urban China

Author(s): Lakshmi Iyer, Xin Meng, Nancy Qian and Xiaoxue Zhao

Publication Date: January 2014

Keyword(s): Economic Transition, Labor Mobility and Structural Change

Programme Area(s): Development Economics and Labour Economics

Abstract: This paper studies the policy determinants of economic transition and estimates the demand for labor in the infant private sector in urban China. We show that a reform that untied access to housing in urban areas from working for the state sector accounts for more than a quarter of the overall increase in labor supply to the private sector during 1986-2005. Using the reform to instrument for private-sector labor supply, we find that private-sector labor demand is very elastic. We provide suggestive evidence that the reform equalized wages across sectors and reduced private-sector rents.

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Bibliographic Reference

Iyer, L, Meng, X, Qian, N and Zhao, X. 2014. 'Economic Transition and Private-Sector Labor Demand: Evidence from Urban China'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9794