Abstract
Utilizing provincial-level data from the period of 1994–2008, this article studies the relationship between union density and wages, employment, productivity, and economic output in China. The findings indicate that union density does not affect average wage levels, but is positively associated with aggregate productivity and output. We discuss if and to what extent these findings are consistent with the familiar two faces of unions model and alternative explanations relevant in the context of Chinese labor and union institutions.
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Notes
These data are from China Statistics Yearbooks.
The data are from the article “Reform and opening up: trade unions in China continue to forge ahead”, 2008. The article is available on the website: http://acftu.people.com.cn/GB/67580/134642/135082/8600509.html.
These data are from China Trade Union Yearbook (2009).
These data are from China Trade Union Yearbooks.
These data are from “Statistical Communiqué of the People’s Republic of China on 2008 Developments of Union Organizations and Union Work.”
This was announced in the press conference of the 15th National Congress of Chinese Trade Unions, October 17, 2008.
An English version of the law can be found at http://english.gov.cn/laws/2005-10/11/content_75948.htm.
The six provinces are Liaoning, Jilin, Anhui, Guangxi, Yunnan, and Qinghai.
For example, when Walmart China was approached by the ACFTU Beijing office, it refused the union organization effort with the excuse of “workers do not have such an interest.” Beijing Wanbao, 2004/10/24, available at http://finance.sina.com.cn/money/x/20041124/18301178422.shtml
In China, economic activities are categorized into the following three general industries: primary industry refers to agriculture, forestry, animal husbandry and fishery and services in support of these industries; secondary industry includes mining and quarrying, manufacturing, production and supply of electricity, water and gas, and construction; tertiary industry refers to all other economic activities not included in the primary or secondary industries, mainly the service sector.
Less aggregate data sources might also include similar biases. For example, Yao and Zhong’s (2013) organizational-level data set was collected by surveying managers about their organization’s corporate social responsibility practices and managers might want their organizations to look good by overstating how well they treat their workers.
In 1997 Chongqing became the fourth municipal city directly under the central government, but because separate data for Chongqing are not available prior to this time, we continue to treat Chongqing and Sichuan as one province by combining the reported figures.
This is from the article “Reform and opening up: trade unions in China continue to forge ahead”, 2008. The article is available on the website: http://acftu.people.com.cn/GB/67580/134642/135082/8600509.html.
We use a fixed effects rather than first difference model of panel data to estimate because there is not a strong correlation across years and the number of years (15) is less than the number of provinces (29).
We also estimated instrumental variables models using the Arellano-Bond estimator that relies on lagged values, but in most cases the Sargan test of overidentifying restrictions had very small p-values casting doubt on the validity of the instruments.
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Wei Chi thanks support by the National Natural Science Foundation of China (grant no. 71121001); and Beijing Higher Education Young Elite Teacher Project (grant no. YETP0139).
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Budd, J.W., Chi, W., Wang, Y. et al. What Do Unions in China Do? Provincial-Level Evidence on Wages, Employment, Productivity, and Economic Output. J Labor Res 35, 185–204 (2014). https://doi.org/10.1007/s12122-014-9178-4
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DOI: https://doi.org/10.1007/s12122-014-9178-4