Xiaoxue Zhao’s paper (with Lakshmi Iyer, Xin Meng, and Nancy Qian), “Economic Transition and Private-Sector Labor Demand: Evidence from Urban China,” was published in the Journal of Comparative Economics in September, 2019.
The paper examines the impact of the first wave of China’s housing reforms, which untied access to housing in urban areas from working for the state sector, on the transition of labor from the state sector to the infant private sector. The authors find that the reform significantly increased private housing ownership and private-sector employment, reduced private-sector wages, but had no effect on unemployment or self-employment. These results identify China’s unclear property rights in the urban housing market as a source of labor market distortions and imply that the privatization of the housing market may be an important contributing factor in the rapid development of the private sector in China in the late 1990s.