Breaking the "Iron Rice Bowl": Reform, Labor Market Misallocation, and Productivity

15:40-17:00, Friday, June 6, 2025

I-206, Boxue Building

Dr. Helu JIANG is now an Associate Professor of Economics at Shanghai University of Finance and Economics. She earned her Ph.D. in economics from Washington University in St. Louis in 2019. Her research interests include macroeconomics, growth and development, labor economics, and Chinese economy. She has her paper published in International Economic Review, Journal of Monetary Economic, Review of Economic Dynamics.

Reallocation of workers across firms was extremely restricted under the so-called “Iron Rice Bowl”: system in China before its state-owned enterprises (SOE) reform in the late 1990s. An average worker spent 80% of her work life in one single firm in 1995; this number decreased to below 30% in 2018. This paper revisits this reform through the lens of a heterogeneous firm model with a frictional labor market. We first show how the old system leads to labor misallocation and efficiency loss for SOEs, and then evaluate the impact of reform-induced worker reallocation across firms, along both the intensive and extensive margins, on aggregate productivity.

For more information of the seminar, scan the following QR code(s) to join Tencent QQ group (904 544 292) or WeChat group named "IAER Seminar (4)", please.

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(QR code is valid until June 6, 2025)