On the Emergence of Labour Redundancy in China's State Industry: Findings from a 1980-1994 Data Panel

Xiao-yuan Dong and Louis Putterman

Comparative Economic Studies, 2001, vol. 43, issue 2, 128 pages

Abstract: The need to lay off redundant employees emerged as an important policy issue in urban China in the 1990s. The degree of over-manning can be estimated by comparing estimates of the marginal product of labor with estimates of the full wage, including bonuses, subsidies, and non-cash benefits. We present estimates from a panel of 752 industrial SOEs for the years 1980-94. These estimates show a rising trend of redundancy with substantial differences among industries. They confirm both out earlier finding that over-manning was not general in the pre-reform era, and the prevailing view that it was a severe problem in the 1990s. Comparative Economic Studies (2001) 43, 111–128. doi:10.1057/ces.2001.10

Date: 2001
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