On The China's Labor Market Segmentation Since Reform And Opening-up

There exists serious segmentation in China's labor market, which impairs the development of society and economy to a large extent. As we know, with the study of western Labor Market Segmentation for several decades, a systematic theory of modern labor market segmentation including corresponding methods and policy propositions has been formed. With this theory of modern labor market segmentation, in this paper, we studied the China's segmented labor market after reform and opening-up.As a country in the economic transition period, China's labor market segmentation is institutional segmentation, which is different from those of western countries. Analyzing form employee side of China's labor market , we find that, on the middle age of 1990s, China's urban labor market evolved from rural-urban dual structure to the segmentation of labor forces from local citizen and immigrants. The former is caused by many social regulations inherited from planned economic system, whereas the later results from the discriminating policies enacted by city government, and thus its extent of segmentation varies with different city. The paper regards Beijing as a case to analyze the dual labor market segmentation and its evolvement course. Two kinds of employer segmentations in China's labor market, ownership segmentation and vocation segmentation are demonstrated by empirical analyses. Further analysis shows that,with the prosperity of private economy and formation of competitive and monopolistic industry, the ownership segmentation continuously weakens while vocation segmentation gradually develops. At the end, the "insider - outsider" model is used to illustrate the mechanism of China's labor market segmentation. Moreover, the influences of labor market segmentation on rent-seeking, income distribution and human capital investment are discussed.In conclusion, the China's institutional labor market segmentation is a unique phenomenon in the economic transition period, and its evolvement reflects the economic reform gradually deepening and market force increasing. It follows the law of economic development that the China's institutional labor market segmentation will weaken gradually and disappear at last.