On unemployment inflow and outflow in urban China

Abstract

As the largest transitional economy in the world, China's labour market has a number of characteristics distinctively different from that of the developed economies like the UK or the USA. This paper aims to identify the determinants of unemployment inflow and outflow in urban China. With empirical data for 29 provinces over the period 1989-99, it is found that rural-urban migration, ownership diversification, industrial structural change, international trade, international competitiveness, product wages, and age structure are key determinants of unemployment flows. The results suggest that due to market imperfections, unemployment inflow and outflow are two asymmetric processes with respect to the concerned pre-determined variables.