Gains from Contractualization: Evidence from Labor Regulations on Chinese Workers

Abstract: In China, all employment relationships must be covered by a written labor contract which considerably strengthens employment protection for workers. Using a unique longitudinal dataset, the China Labor Dynamics Survey (2012-2016), this paper estimates the impact of the contractualization of labor relations on workers' welfare, job satisfaction, and labor market outcomes. Our estimations show that getting a labor contract leads to an increase in workers' salary, insurance participation, and income satisfaction. Results are robust to the addition of individual fixed effects to control for potential unobserved heterogeneity