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Informal Employment in China: Trends, Patterns and Determinants of Entry

Zhe Liang (), Simon Appleton and Lina Song
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Zhe Liang: University of Nottingham

No 10139, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We empirically deconstruct informal employment in China into private business owners and casual workers without job contracts. Survey data from 2007 and 2013 document a rise in informal employment to the point where it exceeds formal employment, potentially an unintended consequence of the 2008 New Labour Contract Law. Compared with formal employees and business owners, casual workers report the lowest monetary and subjective wellbeing although business owners work longer hours with less social protection. Descriptive statistics and multivariate modelling reveal formal employees tend to have more favoured characteristics, often being educated, male, healthy and able bodied. Casual workers are more likely to have the characteristics of vulnerable groups, so the growth of casual employment is particularly concerning. There are indications that running small business is not always a sign of vulnerability and it may provide job flexibility for those with dependents to care for.

Keywords: informal employment; determinants; human capital; China (search for similar items in EconPapers)
JEL-codes: D03 J46 O15 P23 P36 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-iue, nep-lma and nep-tra
Date: 2016-08
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