## China’s Labor Market in the “New Normal”

_IMF Working Papers, July 13, 2015_

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## Bibliographic details
- Authors: Waikei R Lam, Xiaoguang Liu, Alfred Schipke
- Published: July 13, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513570693.001

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### Summary findings
- As China implements reforms under the “new normal,” maintaining stability in the labor market is a priority.
- The country’s demography and labor dynamics are changing after benefitting in past decades from ample cheap labor.
- So far, the labor market appears to be resilient, even as growth slows, driven in part by expansion of the services sector.
- Migrant flows and possible labor hoarding in overcapacity sectors may help explain continued labor market stability.
- Migrant flows and labor hoarding serve as short-term shock absorbers but, if persistent, may:
  - Delay the needed adjustment process.
  - Contribute to an inefficient allocation of resources.
  - Curtail productivity gains.

### Quantitative focus and scenarios
- The paper quantifies to what extent structural trends and the reform pace affect employment growth under the new normal.
- Delays in reform implementation would:
  - Weaken growth prospects in the medium term.
  - Run the risk that job creation will fall below policy targets.
  - Lead to labor market pressures in the future.
- Successful transition scenario would require faster reforms, including in the overcapacity and state-owned enterprise sectors, supported by well targeted social safety nets.

### Policy implications and recommendations
- Accelerate reforms in overcapacity sectors to avoid prolonged labor hoarding and inefficiencies.
- Advance reforms in state-owned enterprise sectors to facilitate reallocation and productivity gains.
- Implement well targeted social safety nets to support workers during transition and to cushion short-term shocks.

### Publication and metadata
- Authors: Waikei Raphael Lam, Xiaoguang Liu, Alfred Schipke
- Publication date: July 13, 2015
- Series: Working Paper No. 2015/151
- Issue: 151
- Volume: 2015
- Pages: 34
- DOI: https://doi.org/10.5089/9781513570693.001
- Stock No: WPIEA2015151
- ISBN: 9781513570693
- ISSN: 1018-5941
- Also available in 中文
- Subjects: Economic sectors, Employment, Labor, Labor markets, Migration, Population and demographics, Services sector, Unemployment rate
- Keywords: China, Employment, Global, growth rate, labor market, labor market condition, labor market mobility, labor market resilience, Labor Markets, Migration, Mobility, per capita income, productivity gain, Services sector, Unemployment, WP

*Source: IMF Working Paper “China’s Labor Market in the “New Normal””, Waikei Raphael Lam, Xiaoguang Liu, Alfred Schipke, July 13, 2015.*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/chinas-labor-market-in-the-new-normal-43072_