China's Labor Market Segmentation And Its Causes

Labor Market Segmentation theories provide us a framework, which much more accords with reality, for analyzing the function of labor market. Labor market segmentation emerges in the function of China' s labor market in evidence, and it changes in the characteristics of different stages. In the planned economy era, China' s labor market segmentation mainly includes urban-rural segmentation, regional segmentation, and industrial segmentation. However, in the initial stage of Reform and Opening-up, labor segmentation is gradually obvious in different ownership enterprises. With increasingly deepening of the reform, the segmentation caused by institution is gradually weakening, replaced by the inner-outer labor market segmentation in urban and the dual-structure labor market segmentation in rural, while urban-rural segmentation is still the main character of China' s labor market.Institution is a key factor of those which cause China' s labor market segmentation, especially the fact that planned economy determines the character of the segmentation. The institution factors, such as economic system, industrial policy, employment policy, household registration system and ownership structure are contribute to China' s labor market segmentation. While, individual social capital is also an important factor. Social capital affects the function of labor market by providing market information and influencing the labor supply. This article will analyze the function mechanism of labor market segmentation caused by institution factors and social capital, for offering policy recommendations about how to weaken labor market segmentation and consummate the function of labor market.