Rural Migrant Workers’ Welfare and Labor Protection in China under the Labor Contract Law

Du Pengcheng 1 Xu Shu 2 and Wu Mingqin 3
1 School of Economics, Capital University of Economics and Business (CUEB), Beijing, China
2 School of Economics, Southwestern University of Finance and Economics (SWUFE), Chengdu, China
3 School of Economics and Management, South China Normal University, Guangzhou, China

Abstract: This paper employs difference-in-differences (DID) approach to evaluate the effects of China’s Labor Contract Law’s implementation on rural migrant workers’ welfare. Our findings suggest that the Labor Contract Law has reduced rural migrant workers’ working hours by 23%, and increased their social insurance coverage by 10% to 26%. This conclusion holds true after removal of sample selection bias and policy expectation factor.Further analysis reveals that Labor Contract Law’s welfare improvement effect was more significant for migrant workers in regions where workers had poor bargaining power. Other economic factors during the same period of time did not affect the law’s labor protection effect. Our findings give a clear answer to controversies over whether the Labor Contract Law can improve labor rights for underprivileged groups, and are of reference value for developing labor protection systems.

Keywords: labor protection, migrant workers’ welfare, selective bias.

JEL Classification Codes: J53, J61, K12
DOI:1 0.19602/j .chinaeconomist.2019.3.07119602/