The Labor Contract Law and the economic integration of rural migrants in urban China

Abstract

This study examines the income determinants of rural migrants versus urban residents in the urban labor market of China during the 2008 Labor Contract Law era. We focus on the effects of employment contracts, enterprise ownership and social networks on income using data from the 2009 Rural-Urban Migration in China survey and applying ordinary least squares regression and propensity score matching analyses. The results showed that urban residents were more advantaged with guaranteed respectable job earnings, stable employment contracts and involvement in state-owned enterprises and public organizations compared to rural migrants. Rural migrants earned much less than their urban counterparts across ownership sectors. Although rural migrants benefited from urban networks, social exclusion impeded their accumulation of urban ties. Despite the Chinese Government’s call in recent years to fully support the citizenization of rural migrants by revising the Labor Contract Law and reforming the household registration ( hukou) system, the study showed that the integration of rural migrant workers in urban China has a long way to go.