Study On The Forming Mechnism Of Informal Emplyment In Transitional China

There exists a common sense that informal economy (IEC) has been a significant presence of the world's economic life, and with the rapid economic development and structural adjustment, the phenomenon of informal employment (IEM) is now drawing extensive interests from the economists and socialists. In China, promoting the development of IEM has been a strategic choice to alleviate the increasing pressure of unemployment.Based on a brief review about research and study mainly done in the U. S. A, and several theories and perspectives that attempt to explain the existence of the IEM in the industrialized countries, as well as developing countries, this article describes the System Conversion and Structural Transition of China in the past decades, and tries to summarize the forming mechanism of IEM in transitional China, through analysis on demand and supply situation of the labor force and the systematic environment caused by the factors referred above. In this part, there is a model of human capital investment under the background of dual-Labor Market Segmentation due to series of institutional arrangements in traditional planned economy system, and a specific explanation of IEM after State-Owned-Enterprises' transforms.What's more, this paper also gives four empirical cases to verify the presence of IEM in China, which will further people's realization and interpretation on this area and arouse the conscience of protecting the workers and entrepreneurs who engage in IEM.Finally, it puts up several realistic suggestions in order to optimize IEM's promising employment effects, and decrease its pessimistic effects, hoping that it can shed some light on China's IEM study and practice.