Unemployment and labor force participation in urban China

This paper serves to document and analyze the employment and the labor market changes in urban China since the late 1980s. High and sustained GDP growth rates in China have paradoxically been accompanied by increasing unemployment rates and decreasing labor force participation rates. Using national representative micro data, estimations from logit models show that age, education, communist-party membership and marital status are significantly associated with participation in the labor force and employment opportunities, and the impacts of education and party membership have increased over time. An extension of the Blinder–Oaxaca decomposition finds little of the observed male–female differentials attributable to differences in characteristics such as age or education but to coefficient effects, a possible reflection of discrimination.

► I analyze patterns and trends in Chinese urban labor market since 1980s. ► Migration, SOE bankruptcies and university expansion changed the labor market. ► Age, education, party membership and marital status matter. ► Returns to education and party membership increase over time, especially women. ► Little of the gender differentials are attributable to differences in endowments.