Institutional Labour Market Segmentation in China

Shi Li, Haiyuan Wan

Abstract


As the excessive labour market segmentation has negatively affected China’s social and economic development in many ways, this paper describes the status quo of China’s labour market segmentation and the segmentation’s history since 2000. In addition, the paper analyzes institutional factors that affect labour market segmentation among different groups and assesses the effects of specific policies that are closely related to the development of the labour market. More specifically, this paper reviews key labour market policies and programs introduced during the last decade and analyzes the impact of the Minimum Wage Policy, the Labour Contract Law and the Household Registration System (hukou) on labour market segmentation. At last, it offers several policy recommendations to reduce the China’s labour market segmentation.

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