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

Gallagher, Mary E.; Giles, John; Park, Albert; Wang, Meiyan

doi:10.1596/1813-9450-6542

Cited by 41 publications

(62 citation statements)

References 13 publications

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confidence: 99%

“…This is a very crude and probably unsatisfactory approach given that it conflates contract status with other job attributes. Other research has found that the share of "formal" workers with labor contracts increased after the Law was implemented (Gallagher et al, 2014).The difference-in-difference specification comparing impacts on formal employees and temporary employees while controlling for macro labor conditions produces quite different †Correspondence: …”

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confidence: 99%

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Comment on “The Labor Contract Law, Macro Conditions, Self-Selection, and Labor Market Outcomes for Migrants in China”

Park

2017

Asian Economic Policy Review

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JEL codes: J30, J41 Meng (2017) analyzes survey data from China to assess the impact of China's 2008 Labor Contract Law on the employment outcomes of migrant workers in China. Her results suggest that the Law had mixed impacts, likely negatively affecting wages and working hours, but positively affecting social insurance participation. Meng finds that many outcomes targeted by the Law are strongly influenced by macro labor conditions as measured by city wages and unemployment rates, rightly pointing out that studies must take macro-factors into account to correctly assess the impact of labor regulations. She also points out that changes over time in the impact of labor contracts on employment outcomes could result from changes in selectivity of what types of people have jobs with labor contracts rather than the impacts of the Law itself, and presents evidence that such bias leads to an overestimation of the impacts of the Law.Meng is up front about the difficulty of cleanly identifying the impact of the Law because it was implemented nationally at one point in time. As a result, any before-after comparisons could merely reflect changing labor market conditions in China. There are also limitations imposed by the available data. The Rural-Urban Migration in China Project (RUMICI) migrant panel data in 15 cities only began in 2008, after the law was implemented. Thus, before-after comparisons must rely either on repeated cross-sectional data using RUMICI pretest data on migrants from 4 cities in 2007 or the population mini-census data in 2005, which used a different sampling approach. Another major limitation is that the RUMICI survey did not ask questions about whether workers had signed labor contracts until 2010. As a result, Meng uses formal employment (permanent or fixed term employment, rather than temporary employment) as a proxy for having a labor contract for the years before 2010. This is a very crude and probably unsatisfactory approach given that it conflates contract status with other job attributes. Other research has found that the share of "formal" workers with labor contracts increased after the Law was implemented (Gallagher et al., 2014).The difference-in-difference specification comparing impacts on formal employees and temporary employees while controlling for macro labor conditions produces quite different †Correspondence:

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Comment on “The Labor Contract Law, Macro Conditions, Self-Selection, and Labor Market Outcomes for Migrants in China”

Park

2017

Asian Economic Policy Review

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“…Furthermore, the law is often intentionally ambiguous, leaving it to local and national leaders to interpret. Finally, laws and interpretations are only as good as the enforcement (Gallagher et al 2015), which requires a different set of institutions and resources than those required to make laws (Gallagher and Dong 2011). Thus, laws are not an adequate tool for limiting precarisation or limiting worker vulnerability, and this holds true across different national contexts.…”

Section: Sarah Swidermentioning

confidence: 99%

Disturbances in Heaven

Franceschini¹,

Lin²,

Loubere³

2017

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“…Foreign and domestic business interests weighed in as well, generally seeking to strengthen the rights of employers vis-a-vis workers. The American Chamber of Commerce expressed serious concern that the law would be enforced more stringently in foreign-owned firms than in domestic ones (Freeman and Li 2013;Gallagher et al 2013;Pringle 2011).…”

Section: Overview Of the 2008 Labor Contract Lawmentioning

confidence: 99%

“…Surveys in 2009 and 2010 found that most workers were aware of the legislation, at least in general terms. The number of workers covered by labor contracts increased significantly (Freeman and Li 2013, 8;Gallagher et al 2013). Because the Labor Contract Law provides that contracts cover not only wages and work conditions, but social insurance protection as well, the law increased the number of workers who were enrolled in pension and other social insurance plans (Gallagher et al 2013).…”

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confidence: 99%