Rural Industry and Labor Market Integration in Eastern China

  This paper tests the competitiveness of the labor market in a semi-industrialized county located in eastern China. Labor market segmentation is linked to the degree of government interventions and the management structures of the local enterprises, and two forms of rationing labeled entrance and time rationing are identified. A test based on income maximizing behavior is developed to find the form of rationing that is consistent with the data. The results show that the labor market is not competitive and time rationing prevails in the county. In addition,industrial wages are not responsive to experience and education, but strongly biased against women and varying to government interventions.

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