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Informal Employment and Internal Migration: The Case of China

Informal Employment and Internal Migration: The Case of China. Johannes Jütting Theodora Xenogiani OECD Development Centre. DRC, Beijing , 27 November 2007 . Why Focus on China?. Big informal sector: about half of urban employment is informal

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Informal Employment and Internal Migration: The Case of China

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  1. Informal Employment and Internal Migration: The Case of China Johannes Jütting Theodora Xenogiani OECD Development Centre DRC, Beijing, 27 November 2007 

  2. Why Focus on China? • Big informal sector: about half of urban employment is informal • Large migrant flows from the countryside to cities: 120 – 150m internal migrants • Serious concerns about migrants’ social protection rights, working conditions and integration • Less focus on the situation of those (family members and others) who are left behind in rural areas

  3. Characteristics • Informal employment accounts for about ½ of total urban employment (different definitions provide slightly different results) • Employment in the informal sector rose from 32m in 1995 to 125m or 47% of total urban employment in 2004 (Cai, Du and Wang, 2006) The informal sector is considered as: • the fastest growing segment of urban labour market • a highly dynamic and mobile sector • heterogeneous • more competitive and less segmented than formal sector • often as the driver of economic growth in China

  4. Employment Trends Source: Ghose 2005

  5. Characteristics What is particular about the informal sector in China and the way it is perceived? • Considered as one of the main forces driving economic growth • Treated as part of national economy, subject to government regulations and management • A highly mobile, dynamic and competitive sector • It has tight links with internal migration

  6. Causes of Growing Informality • Economic restructuring (decline in agriculture, SOE restructuring) • Migration to cities, urbanisation, demographic pressure • Productivity, missing formal jobs • Labour market segmentation • Globalisation leading to increasing demand for labour-intensive product exports • Weak formal safety nets • Social protection system providing incentives for growing informality • Other?

  7. Migration: High and on the Rise Source: Cai and Wang, 2005

  8. Migration: Only Positive? • Migration has played a major role in Chinese growth and economic development (macro level) • Migration “must” be good for the migrants themselves (micro level) BUT concerns about: • Social protection of migrants and their families • Workers’ rights and work conditions • Social impact in sending regions • Sustainability?

  9. Migration, Labour Markets and Social Protection: An Emerging Agenda in China? Key questions: • What policies need to be put in place to manage the challenges of social protection and bad work conditions? • What is the impact of migration on families left behind (remittances, social protection, education, health care)? • What is the impact on the sending regions (labour markets, productivity, trade)? • What changes in institutional set-ups are needed to promote a more harmonious society?

  10. Thank you! www.oecd.org/dev

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