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A simple model of the Chinese dual labor market & ongoing reforms

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Lex Zhao

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Working paper

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Lex Zhao

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Hukou is key in generating trade pattern & trade boom

Trade pattern: exporting manufacturing

low-end manufacturing: textiles, wood products, low-tech.

electronics----made by low-skilled workers

Trade boom: drastic increase in trade volume.

Conclusion:

A simple model describing the Chinese dual labor market; Transition from the Mao era to the Reform era; Migrant workers & their contribution in generating the export boom; Gains from reform & income distribution; Agricultural tax, Export-tax subsidy, FDI; Urbanization; Population bonus; Privatization