The State Of Labor Dispatch And Reasons For Dispatch Employment

After the enforcement of labor contract law, labor dispatching has developed rapidly. Behind the excessive prosperity of labor dispatching, many problems emerge such as remote dispatch, unequal pay and obscure legal liability between dispatch agencies and labor units. First, the paper will analyzes the current situation of labor dispatch in Hangzhou using2012survey data.Why labor units use large number of dispatch workers? It is generally believed that saving labor costs through unequal wages is one reason, and also won the support of some statistics. But "equal work" in "equal pay for equal work’" is not simply referring to the same position. And the extents of "unequal pay for equal work" which can be realized by different ownership enterprises are different due to various degree of monopoly. This article uses OLS and PSM to estimate the degree of unequal pay for equal work in different ownership enterprises after controlling heterogeneity. It’s found that in private sector there’s no significant difference in income between dispatch workers and own staff, gap in state-owned enterprises is the largest and foreign-funded enterprises follow. It should be noted that dispatch workers and own staff of SOEs or foreign-funded enterprises are difficult to balance, which to some extent shows that there’s heterogeneity in these two types of workers. This article also matches dispatch workers of SOEs or foreign-funded enterprises to all employees (own staff) of private sector and the result shows that the income gap is much closer than the gap within SOEs or foreign-funded enterprises with the balancing test passed. This indicates that direct comparison between dispatch workers and own staff within SOEs or foreign-funded enterprises may expand the extent of unequal pay.Based on the above analysis of unequal pay, the paper further explores the reasons for the use of dispatch workers. And finally the paper gives some policy recommendations.