Job and Worker Reallocation in China

This study sheds light on the dynamic of China's urban labor market during the period 1991-2009, focusing on job creation, job destruction, worker inflows, and worker outflows. We used worker-related data for all industries, including reallocations between firms and within firms. We found that job creation has been quite active for two decades and coincides with the business cycle, as in most other countries. China's economic growth has been accompanied by the active creation of efficient jobs and large-scale destruction of inefficient jobs, which helps to explain the coexistence of high economic growth and low employment growth. The economic revolution has also resulted in a high level of between-sector reallocation. The characteristics of worker flows in the main ownership-based sectors differ greatly.