Long Run Trends in Unemployment and Labor Force Participation in China

Unemployment rates in countries across the world are typically positively correlated with GDP. China is an unusual outlier from the pattern, with abnormally low, and suspiciously stable, unemployment rates according to its official statistics. This paper calculates, for the first time, China’s unemployment rate from 1988 to 2009 using a more reliable, nationally representative household survey in China. The unemployment rates the paper calculates differ dramatically from those supplied in official data and are much more consistent with what is known about China’s labor market and how it has changed over time in response to structural changes and other significant events.