From Permanent Employment to Massive Layoffs: The Political Economy of "Transitional Unemployment" in Urban China (1993-8)

Discusses transitional unemployment in the context of the increasing number of laid-off Chinese workers since 1993 with reforms of state-owned enterprises. It is argued that the massive lay-offs are rooted in the full employment policy of the state sector under the centrally planned economy. The total number of laid-off workers accumulated to a dangerous level in 1998 because the social welfare system, which depended on work units for delivering benefits & was limited to the state sector, hindered the mobility of laid-off workers from the state to the nonstate sector. To cope with the problem of the high unemployment rate accompanying the transition to the market economy, certain institutional reforms purporting to abolish the institutional barriers between the two labor markets, in the state & the nonstate sectors, must be taken into account in policy making. 6 Tables, 52 References. Adapted from the source document.