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Abstract

The first essay empirically examines the impact of Labor Contract Law (LCL) on Chinese firms' hiring costs for each industry. I find that the LCL positively correlated to the hike of hiring cost in the manufacturing sector, and negatively contributed to the pre-tax wage growth in sectors dominated by state-owned firms. The second essay provides an interpretation as to why some of the Chinese cities are having a severe labor shortage. A demand-side approach suggests that the labor demand-supply gap depends on firms' capital rental cost per worker. In the third essay, I show that the registered urban unemployment rate increases with the tax hike. The urban households are exclusively benefiting from the tax revenue, which decreases the aggregate demand for urban workers.

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