THE RISE OF RURAL-TO-RURAL LABOR MARKETS IN CHINA



prevalence of incoming workers in the village. If communities have even more strict
policies to encourage the employment of village resiedents, and enterprises (either private
or collective) can hire incoming labor only when no village residents are willing to take
the job, we should expect the size of the labor force to be negatively correlated with the
proportion of incoming labor.

Empirical Specification

To examine these issues, we estimate an empirical model of the demand for
incoming labor in village industry. The dependent variable in our model is the percent of
incoming labor among the village industrial workforce. We estimate separate equations
for total incoming labor as a percentage of the village’s labor force, commuters, and
migrants. The model is estimated only on the villages with at least one industrial firm,
which in our sample included 87 villages in 1988 and 130 villages in 1995 out of the 215
villages surveyed.vii

In our final labor demand specification, we regress a measure of incoming worker
demand on variables that capture the costs of hiring, constraints on local employment
decisions, and provincial dummies. Separate equations are estimated for 1995 and 1988
since a Chow test of structural change indicates firms are behaving differently over time.
In addition to the local wage, we also include a lagged dependent variable in the 1995
equation. We believe that this variable will measure, among other things, the experience
and investments that firms have made in hiring incoming workers in the past, and can
serve as a proxy for the non-wage costs of hiring incoming workers.

In addition to variables measuring the direct costs of hiring, four other variables
are included. If a village has firms producing products in the light industrial category, a

21



More intriguing information

1. Financial Market Volatility and Primary Placements
2. MULTIPLE COMPARISONS WITH THE BEST: BAYESIAN PRECISION MEASURES OF EFFICIENCY RANKINGS
3. Examining Variations of Prominent Features in Genre Classification
4. Magnetic Resonance Imaging in patients with ICDs and Pacemakers
5. Trade Liberalization, Firm Performance and Labour Market Outcomes in the Developing World: What Can We Learn from Micro-LevelData?
6. The name is absent
7. DEMAND FOR MEAT AND FISH PRODUCTS IN KOREA
8. Economie de l’entrepreneur faits et théories (The economics of entrepreneur facts and theories)
9. Campanile Orchestra
10. International Financial Integration*
11. Return Predictability and Stock Market Crashes in a Simple Rational Expectations Model
12. Wirkt eine Preisregulierung nur auf den Preis?: Anmerkungen zu den Wirkungen einer Preisregulierung auf das Werbevolumen
13. Cyclical Changes in Short-Run Earnings Mobility in Canada, 1982-1996
14. WP RR 17 - Industrial relations in the transport sector in the Netherlands
15. The name is absent
16. STIMULATING COOPERATION AMONG FARMERS IN A POST-SOCIALIST ECONOMY: LESSONS FROM A PUBLIC-PRIVATE MARKETING PARTNERSHIP IN POLAND
17. Les freins culturels à l'adoption des IFRS en Europe : une analyse du cas français
18. The name is absent
19. MICROWORLDS BASED ON LINEAR EQUATION SYSTEMS: A NEW APPROACH TO COMPLEX PROBLEM SOLVING AND EXPERIMENTAL RESULTS
20. Does Presenting Patients’ BMI Increase Documentation of Obesity?