Working Paper: NBER ID: w19254
Authors: Richard B. Freeman; Xiaoying Li
Abstract: China's new Labor Contract Law took effect on January 2008 and required firms to give migrant workers written contracts, strengthened labor protections for workers and contained penalties for firms that did not follow the labor code. This paper uses survey data of migrant workers in the Pearl River Delta before and after the law and a retrospective question on when workers received their first labor contract to assess the effects of the law on labor outcomes. The evidence shows that the new law increased the percentage of migrant workers with written contracts, which in turn raised social insurance coverage, reduced the likelihood of wage arrears, and raised the likelihood that the worker had a union at their workplace.
Keywords: Labor Contract Law; Migrant Workers; China; Labor Rights; Social Insurance
JEL Codes: J01; J28; J53; K31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Implementation of the law (K40) | Increased likelihood of obtaining written contracts (D86) |
| Increased likelihood of obtaining written contracts (D86) | Increased social insurance coverage (H55) |
| Increased likelihood of obtaining written contracts (D86) | Decreased wage arrears (J31) |
| Increased likelihood of obtaining written contracts (D86) | Increased likelihood of union representation (J58) |