2012年-世界发展银行全球_Labor_Regulation_and_Enterprise_Employment_in_China_38页_458kb

Summary of "Labor Regulation and Enterprise Employment in China"

Core Content

This paper investigates the impact of China's 2008 Labor Contract Law on employment in manufacturing enterprises, using data from a national survey of 1644 firms conducted in 2009. The study also examines how the global economic crisis of 2008–2009 influenced the implementation and effectiveness of the new labor regulations.

Main Research Questions

1. What are the determinants of labor regulation enforcement?
2. How did city-level variation in enforcement of the Labor Contract Law affect employment in manufacturing firms?
3. To what extent did the global economic crisis mediate the impact of enforcement on employment?

Key Findings

• Enforcement of the Labor Contract Law: The Law introduced more protective provisions for workers, such as requiring open-ended contracts after two fixed-term contracts or ten years of employment, and imposing stricter severance conditions. Despite these provisions, there is no evidence that the global economic crisis led to reduced enforcement of the Law.

• Impact on Employment: Cities with lax prior enforcement of labor regulations experienced a greater increase in enforcement after 2008 and slower employment growth. This result is robust to the inclusion of city-level controls and alternative measures of enforcement effort.

• Firm-Level Effects: The impact of the Law on employment varied by firm type. Exporting firms were less sensitive to enforcement of labor regulations, suggesting that the crisis may have mitigated the negative effects of the Law on employment.

• Heterogeneity Across Regions and Firms: There were significant differences in the perceived strictness of enforcement across sectors, ownership types, and firm sizes. State-owned firms and larger firms were more likely to report stricter enforcement. Coastal provinces (e.g., Zhejiang, Guangdong) generally experienced larger employment impacts compared to inland provinces.

• Methodological Considerations: The study uses firm-level panel data, which allows for the examination of heterogeneity in the impact of labor regulations. However, the data may under-sample small firms. To address potential endogeneity, the authors use city-level enforcement measures and cluster standard errors. They also test the robustness of their results using alternative measures of enforcement effort and city-level regressions.

Theoretical Framework

The authors present a simple model where employment is a function of the optimal employment level (assuming perfect enforcement) and the strictness of enforcement:

$$
\mathrm{E}_t = \mathrm{L}_t / \mathrm{S}_t
$$

Where:

• $E_t$ is employment
• $L_t$ is the optimal employment level
• $S_t$ is the strictness of enforcement

They argue that changes in enforcement strictness can be influenced by the economic environment, particularly export shocks.

Data and Methodology

• Data Source: A nationally representative survey of 1644 manufacturing firms conducted in 2009, linked to city-level data from the 2008 China Urban Statistical Yearbook.
• Variables:
  • Enforcement strictness: Measured by firm managers’ subjective assessments (1=not strict, 2=strict, 3=very strict).
  • Export demand shocks: Calculated as the change in export values over different time periods.
  • City-level controls: GDP per capita, GDP growth rate, population, government expenditures, mean wage, and share of employment in the secondary sector.
• Methodology: The study estimates both static and dynamic models to assess the determinants of enforcement strictness and its impact on employment. The dynamic model controls for enforcement strictness in 2007 to isolate the effect of changes in enforcement.

Empirical Results

• Enforcement Trends: The perceived strictness of labor regulations increased steadily over time, with no evidence of reduced enforcement during the global economic crisis.
• Employment Changes: From the end of 2007 to mid-2009, production worker employment increased by 3.0% from 2007 to mid-2008, fell by 0.5% from mid-2008 to end-2008, and then increased by 2.9% from end-2008 to mid-2009.
• Regional Differences: Coastal provinces showed larger employment impacts, and state-owned and larger firms were more affected by the Law.
• Crisis Impact: Exporting firms were less sensitive to changes in enforcement, suggesting that the crisis may have played a mediating role in reducing the impact of the Law on employment.

Conclusion

The study finds that the implementation of the 2008 Labor Contract Law led to greater enforcement in cities with previously lax regulation, which was associated with slower employment growth. However, the global economic crisis did not significantly reduce enforcement, and its effects on employment were less pronounced for exporting firms. The results suggest that while the Law may have increased labor costs and reduced flexibility, its impact on employment was not uniform across regions and firm types. The findings contribute to the broader debate on the role of labor regulations in shaping employment outcomes in China.