Through all October, Klaus F. Zimmermann, President GLO and UNU-MERIT, Maastricht, has visited Renmin University of China, where he will leave on October 31. He has enjoyed very much the hospitality and the attractive research environment of the university, he is affiliated with so long as an Honorary Professor. He was discussing research with many colleagues, PhD students and Master students.
Invited and chaired by GLO Fellow Jun Han of Remin University, Zimmermann provided a research seminar on “Arsenic Contamination of Drinking Water and Mental Health” on October 25 in front of a large audience. The presentation was based on a revised version of his recent Princeton University Discussion Paper (Working Paper #607, Princeton University, Industrial Relations Section).
AFTER THE HOUR
After dinner with faculty of Renmin University on October 27, 2018.
From the left: Liqiu Zhao, Zhong Zhao, Zimmermann, Dean Weiguo Yang, and Xiangbo Liu, all Renmin University of China and GLO Fellows.
In front of the special restaurant with Liqiu Zhao.
After dinner with PhD students of Renmin University on Ocober 24, 2018.
New research in the Discussion Paper Series of the Global Labor Organization (GLO): In its Labor Contract Law introduced in 2008, China strengthened the labor protection for workers. As a consequence, temporary work contracts have to be permanent after 10 years of work duration. Randall Akee (University of California, Los Angeles) with GLO Fellows Ligiu Zhao and Zhong Zhao (both Renmin University of China) have presented evidence that Chinese companies have often dismissed workers to avoid such permanent contracts resulting in large welfare losses among those workers.
GLO Fellow Zhong Zhao, Renmin University of China, Beijing, and Associate Editor of the Journal of Population Economics
China’s new Labor Contract Law, which intended to strengthen the labor protection for workers, went into effect on January 1, 2008. The law stipulated that the maximum cumulative duration of successive fixed-term (temporary) labor contracts is 10 years, and employees working for the same employer for more than 10 consecutive years are able to secure an open-ended (permanent) labor contract under the new law, which is highly desirable to employees. However, in order to circumvent the new Labor Contract Law, some employers may have dismissed workers, after the passage of the new law, who had worked in the same firm for more than 10 years. Using data from the 2008 China General Social Survey, we find strong evidence that firms did in fact dismiss their formal-contract employees who have been employed for more than 10 years. Additionally, using a regression discontinuity design based on this exogenous change in unemployment status for this particular group of workers, we show that the dismissed workers suffered significant welfare loss in terms of happiness. Our results are robust to various specifications and placebo tests.
Global international economic relationships are under pressure with unclear consequences for the world economy and individual welfare. The United States of America have left the Trans-Pacific Partnership Agreement, raised tariffs against its trade partners, in particular for China, dismantled the North American Free Trade Agreement, and re-negotiated the terms of bilateral trade with the European Union and Japan.
To debate this development, Dr. Huiyao Wang, President of the Center for China & Globalization in Beijing (CCG) and Counselor for the Chinese State Council, has invited Professor Klaus F. Zimmermann, President of the Global Labor Organization (GLO) and currently visiting Renmin University of China, and other experts to discuss the situation in a private round-table with Hon. Rufus H. Yerxa, President of National Foreign Trade Council, Former Deputy USTR and Deputy Director General of the WTO. The private event takes place on 28 October 2018 at the Center for China & Globalization in Beijing.
Huiyao Henry Wang and Klaus F. Zimmermann have collaborated over the years in other contexts and share a joint vision about the importance of open relationships in a globalized world. Henry Wang (left) and Zimmermann during an CCG event in Washington DC on trade policies in September 2016.
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On October 18, 2018, The China Institute for Employment Research (CIER) at Renmin University of China had celebrated its 10th Anniversary during a regular seasonal meeting to analyze the employment situation at the Chinese labor market. The large and influential meeting of experts from universities, government and business took place in the conference center of Renmin University of China in Beijing. More details.
First row, from the left of GLO President Klaus F. Zimmermann: Former Chinese Minister of Labor Xiaojian Zhang, and GLO Fellows and Professors Xiangquan Zeng (Renmin University, Director CIER) & Shi Li (Beijing Normal University).
The global picture of mobility in the next decades of this century will be characterized by huge demographic imbalances between Asia, Europe and Africa; a core player will be China. While the demand and supple forces are so large that they seem to be unavoidable, they could be moderated by managed migration and educational development strategies. To discuss these issues, GLO President Klaus F. Zimmermann has met population economist Michele Bruni (Team Leader and Resident Expert of the EU-China Social Protection Reform Project, Beijing, and GLO Fellow; see bio below) for various discussions. One product of this collaboration is this interview with Professor Bruni in a Beijing coffee shop.
QUESTION: Your research seems to suggest that the world will soon experience the largest demographic imbalances that mankind has ever seen. What do you mean by this?
During this century, the growth of working age population will level off as a consequence of the unstoppable demographic transition. But this will result from two opposite tendencies: the working age population of (i) an increasing number of countries will sharply decline, and (ii) of an decreasing number of countries, the poorest ones, it will explode. This is an unprecedented demographic polarization due to the very different stages countries are currently in the demographic transition.
Over the next 40 years, the world’s working age population will increase from 4.85 billion to 6.21 billion, this is a rise of 1.36 billion people and 28%. This results from positive balances of 1.9 billion and negative balances of 524 million people. The shrinking areas are lead by China with a share of 48.1%, followed by Europe (25.6%), Asia excluding China (18.2%), Latin America (4.1%), and the new world countries (USA, Canada, Australia and New Zealand) with only 3.8%. The positive balances will be concentrated in Africa (56.8%) and in Asia (37.6 %).
QUESTION: Although both shrinking and aging, China and Europe plan to play the “fortress game”. Will this be sustainable?
In absence of migration the working age population of Europe will decline by 134 million and that of China by 252 million over the next 4 decades. Can Europe and China really continue on their path of economic growth and social development without migrants? Is technological change capable to increase productivity as then needed?
The idea that AI and robots will produce a dramatic decline of labor needs has been put forward by gurus of the new technologies, economists, and obviously politicians. However, this is not supported by empirical evidence, it is static and ignores second order effects. Computer-based technologies may destroy jobs, but may also create new ones. Furthermore, the human mind has what appears to be a limitless capacity and fantasy to “invent” new needs and a limitless capacity to invent and produce new goods to satisfy them. It seems therefore evident that for Europe, China – and other numerous countries like Japan and Korea that will experience an even more dramatic decline of working age population – mass immigration is not an option, but a necessity.
To play the “fortress game” by exploiting irrational fears and ignore how the labor market works and how strong the demographic trends are would be totally irrational. Moreover, this game would be undermined by the market itself that will find a way to satisfy its labor needs. At the same time it is difficult to believe that Africa, a continent plagued by war, endemic problems of corruption, and a low educational level will be able to outperform the Chinese economic miracle and create over a 40 year period the more than 700 million jobs necessary to satisfy its increase of labor supply. Therefore, African mass emigration is not an option, but unavoidable.
QUESTION: Would global collaboration help, and could educational investments be part of a solution?
The demographic polarization contains the potential solution to the problems it generates: The structural need of labor of the countries in the last phase of the demographic transition will correspond a structural excess of labor in the countries in the first phase. However, it is unrealistic that in the present political context immigration countries will open their countries sufficiently allowing the market to do the matching. In my work, I have suggested a cooperative management of migration flows recognizing that arrival countries will almost only need migrants with a medium or high level of education. Hence, the necessary education and vocational training should be financed by the immigration countries and organized by a specialized international organization in the origin countries.
QUESTION: How can China and Europe cooperate, and could they absorb African excess supply of labor?
Europe and China cannot absorb the huge rise in the job-seeking African population, but significantly reduce the burden of job-creation there to less than 400 million. Still a large number, but together with the Chinese infrastructure initiatives the proposed educational activities could help to give the African continent a push. This analysis also suggest that Europe, China and other Asian countries could join forces to maximize the potential of demand-driven migrations, while given its location and rich experience in this field, Europe could take the role of the “training center” of the project.
QUESTION: So the face of migration in the future is “African”?
Human history has already recorded two “out of Africa” migrations. It is a matter of speculation whether those early migrations were due to economic reasons or, as I suspect, to one of the basic characteristic of primates, curiosity. This century will record the third out of Africa migration, but this time migrants will be pulled by the labor needs of Europe and Asia.
BIO Michele Bruni
Michele Bruni holds a Laurea in Political Sciences from the University of Florence and a Ph.D. in Economics from the University of California, Berkeley. He has taught at the Universities of Calabria, Bologna, and Modena. He is a Fellow of the Global Labor Organization (GLO) and member of the Center for the Analysis of Public Policies of the Faculty of Economics “M. Biagi”, University of Modena (CAPP). At present, Bruni lives in Beijing where he is Team Leader and Resident Expert of the EU-China Social Protection Reform Project. For more than twenty five years he has participated as labor market expert in numerous EU, ADB and WB funded projects in Eastern Europe, Africa and South East Asia countries. In his research, Bruni has focused on the development of stock and flow models and their application to the analysis of labor market and migration.
Exciting times in Beijing for labor research economists due to a large number of event activities. GLO President Klaus F. Zimmermann speaks five times within a week. He gave keynote speeches to the 10th anniversary of CIER at their forecasting workshop of the Chinese labor market on October 18. He also gave a keynote to the First Renmin University – GLO research conference on the same topic on Sunday October 21. He will further give research seminars in faculty meetings of Renmin University of China on October 25 and of Beijing Normal University on October 26.
On 21 October 2018, he was also visiting the Capital University of Economics and Business, Beijing. During their hosted Third Annual Conference of Labor Economics in China, he provided a keynote speech on “Migration and Wellbeing” in front of a few hundred participants and made many new contacts. See further details.
Zimmermann meets with a larger number of colleagues and PhD students at the various institutions and is impressed about the high quality of their analysis.
Relaxing times “after the hour” in his favorite club in Beijing:
China is much younger than Europe, but ages much faster reaching and passing Europe in due course. Michele Bruni, EU Expert resident in Beijing and Fellow of the Global Labor Organization (GLO) analyzes the consequences of the significant demographic changes for the Chinese labor market and welfare.
GLO Fellow Michele Bruni, EU Expert, and Resident in Beijing
China still lags behind Europe along the path of the demographic transition and therefore is still much younger. However, due to the speed with which the fertility rate dropped and life expectancy increased, China ageing process will proceed at a very fast space and around the middle of the century the population of China is projected to be as old as that of France and the UK and older than that of the USA. The paper evaluates the labor market and welfare implications of this process, also by an economic indicator of dependency and socioeconomic burden.
The China Institute for Employment Research (CIER) at Renmin University of China, now a globally well known and respected research institution, organizes regular influential meetings by academics, government experts and practitioners from business to judge the state of the Chinese labor market. CIER is directed by Professor Xiangquan Zeng, a former long-term Dean of the School of Labor and Human Resources of Renmin University and Fellow of the Global Labor Organization (GLO). He is also a long-term friend and collaborator of GLO President Klaus F. Zimmermann.
For more than two decades, Zeng and Zimmermann have worked together for the Chinese-German academic relationships. Zimmermann (UNU-MERIT and Maastricht University), Professor Emeritus Bonn University, Founding Director of the Institute for the Study of Labor (IZA) in Bonn, former President of the German Economic Institute (DIW Berlin) and former Professor and Dean at the University of Munich had received and supported very many Chinese scholars in these functions.
Due to the large changes in China and in the world, traditional data sources have often become meaningless and new indicators are needed. It was an innovative initiative, when CIER presented in 2011 for the first time what is now called the CIER-Index, an indicator that measures the tightness of the Chinese labor market by relating the size of jobseekers to the demands of the hiring authorities using survey data from business. The index has established its value and is well used inside and outside China.
On 18 October 2018, the regular seasonal forecasting meeting at Renmin University has dealt with the employment consequences of the global tensions in international economic relations. Concerns have been expressed about the predicted moderation of economic growth and an expected decline in employment, which were detailed and confirmed by CIER analysis and all the experts present.
All invited speakers including Renmin Vice-PresidentLiu Yuanchun, former Labor Minister of ChinaXiaojian Zhang and GLO President Klaus F. Zimmermann expressed in their keynote speeches strongly the importance and significance CIER and its leader, Professor Xiangquan Zeng, had over the entire decade.
In his keynote address at the workshop, GLO President Zimmermann said among others:
“The event today is a regular influential meeting by academics, government experts and practitioners from business to judge the state of the Chinese labor market. It is organized by the China Institute for Employment Research (CIER) at Renmin University of China, now a globally well known and respected research institution. I have regularly visited Renmin University of China and collaborated with CIER and its Leader, and also attended this meeting before. I am happy to be back and I am looking forward with interest to the exchange.
I am deeply honored to be invited to address you at this event, since CIER is celebrating this year its 10th anniversary. During this period CIER has grown remarkably and became a significant voice of economic analysis in China and the world. As a think-tank, CIER has become an academic lighthouse for employment research and policy.
The kind of meeting we have today is innovative in itself, since due to the dramatic changes of China and in the world, traditional data sources have often become meaningless and new indicators and their permanent evaluation have to be organized. It was a great and innovative initiative, when CIER presented in 2011 for the first time what is now called the CIER-Index, an indicator that measures the tightness of the Chinese labor market by relating the size of jobseekers to the demands of the hiring authorities. The index has established its value and is well used inside and outside China.
This year’s conference deals in particular with the employment consequences of the global tensions in international economic relations. While the situations had remained remarkable stable, the dangers for the world economy are large and the consequences for employment may become significant. So I will be very much interested in your analysis as well as I wish all of us luck.
This all has been possible because of the initiatives and the visions of Xiangquan Zeng, a former long-term Dean of the School of Labor and Human Resources, who serves since the beginning as the Director of CIER. He has been a long-term reliable partner, an excellent advisor, and last but not least a very good friend. I can only congratulate Professor Zeng and CIER for these very great achievements!”
During the meeting:
Zimmermann with GLO Fellow Fei Wang, Professor at Renmin University (right)
GLO Fellows Xiangquan Zeng (right) and Shi Li of Beijing Normal University
CIER Director Xiangquan Zeng of Rinmin University during his talk presenting his analysis of the Chinese labor market. In front: Liu Yuanchun, Vice President of Renmin University
During the debate: Liu Yuanchun, Xiangquan Zeng & Klaus F. Zimmermann
Former Chinese Minister of Labor Xiaojian Zhang (middle) with GLO Fellow Xiangquan Zeng (left) & GLO President Klaus F. Zimmermann after a joint dinner.
Renmin University of China and the Global Labor Organization (GLO) have just successfully completed their first joint conference on the Chinese labor market in Beijing on 20 and 21 October 2018. Program Announcement (Chinese link). Program Flyer. See also for further information. More details to come…..
In October 2018, Klaus F. Zimmermann, UNU-MERIT at Maastricht University, and President of the Global Labor Organization (GLO) has taken office at Renmin University of China to discuss joint research interests with colleagues in Beijing. He also promotes research on China, which has been published by the Journal of Population Economics (see below), the academic journal he is heading as the Editor-in-Chief.
The Journal had recently published many studies on China. For instance, it has been found that due to substantial additional government subsidies, the quality of migrant schools has increased:
YuanyuanChen (Shanghai University of Finance and Economics) & ShuaizhangFeng (Jinan University) are both GLO Fellows.
Abstract:“As spaces in public schools are limited, a substantial number of migrant children living in Chinese cities but without local hukou are enrolled in private migrant schools. This paper studies the quality of migrant schools using data collected in Shanghai in 2010 and 2012. Although students in migrant schools perform considerably worse than their counterparts in public schools, the test score difference in mathematics has almost been halved between 2010 and 2012, due to increased financial subsidy from the government. We rule out alternative explanations for the convergence in test scores. We also conduct a falsification test and find no relative changes in the performance of migrant school students based on a follow-up survey of a new cohort of students in 2015 and 2016, a period with no changes in financial subsidies to migrant schools.”
Shuaizhang Feng (right) & Zimmermann at Jinan University in March 2018.
►Informal search, bad search?: The effects of job search method on wages among rural migrants in urban China by Yuanyuan Chen, Le Wang, Min Zhang; Vol. 31:3, 837-876
►The intergenerational education spillovers of pension reform in China by Cheng Yuan, Chengjian Li, Lauren A. Johnston; Vol. 31:3, 671-701
►Run away? Air pollution and emigration interests in China by Yu Qin, Hongjia Zhu; Vol. 31: 1, 235-266
►The heterogeneous impact of pension income on elderly living arrangements: evidence from China’s new rural pension scheme by LingguoCheng, Hong Liu, Ye Zhang, Zhong Zhao; Vol. 31: 1, 155-192
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