Employment constraints and sub-optimality in Chinese enterprises

John Knight, Lina Song

Research output: Journal PublicationArticlepeer-review

27 Citations (Scopus)


In China the employment of rural migrants is tightly controlled by government, with regard both to numbers and to jobs: urban residents receive preference and are protected against competition from migrants. A survey of enterprises employing both urban residents and rural migrants in four cities is analysed, using enterprise-level earnings comparisons, employment functions and production functions. We find both 'job discrimination' and 'wage discrimination' against migrants. The two groups are highly imperfect substitutes or, in a sense, complementary: migrants do the jobs that non-migrants will not or cannot do. The marginal product of migrants exceeds their wage whereas that of non-migrants is below their wage. Although many enterprises have surplus urban workers, they find it beneficial to hire migrant workers as well and are constrained in their employment of migrants.

Original languageEnglish
Pages (from-to)284-299
Number of pages16
JournalOxford Economic Papers
Issue number2
Publication statusPublished - 1999
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics


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