Title: Wages, Participation and Unemployment in the Economic Transition of Urban China
Reference Number: 1177
Publication Date: April 2007
JEL Classifcation: J21, J31, J64, O53, P20

Jun Han
The University of Hong Kong

Junsen Zhang
Chinese University of Hong Kong

Wages, participation and unemployment are major topics for researchers of the labor market. How have these measures evolved in the economic transition of urban China? Have they evolved in accordance with those in the Statistical Yearbook and previous studies? We find that the wage level has been largely understated in the Statistical Yearbook. Our estimated participation rate is lower than that of Giles, Park, and Cai (2006) because the Urban Household Surveys (UHS) that we use include middle and small cities that are absent in their data. The unemployment rate in the published official statistics, the most frequently doubted by researchers, turns out to be significantly biased after the mid-1990s. Our analysis shows that the unemployment rate is much higher than that of the official statistics, but lower than that estimated with the China Urban Labor Survey (CULS) data in Giles, Park, and Zhang (2005). Our analysis provides the first systematic comparison of the wage level from different sources, and supplements the existing estimates on participation and unemployment using a more representative dataset for urban China.

Key words: Wages, participation rates, unemployment rates, economic transition

Last modified: 09/10/2007