China Labor, Income and Population

The China Labor, Income and Population (CLIP) research program focuses on key areas essential for understanding the complexities of China’s labor market and its role in the Chinese economy. We study labor quantity (population), labor quality (human capital), income, and the interactions between technology and labor, while also examining the role of China’s unique institutions, such as the gaokao exam system, hukou system, and the state, in shaping the labor market.

Labor Market

Grasping the intricacies of China’s labor market is essential for understanding its manufacturing power, technological advancements, economic growth, and trade dynamics. Two critical yet underexplored institutional dualities are the rural-urban divide caused by the hukou system, which affects labor mobility and economic opportunities, and the state versus private sector divide, impacting labor allocation and productivity. Our research aims to analyze these dualities to provide insights into their effects on China's labor market in the age of AI and automation. This knowledge is vital for comprehending how China's economy functions and informing policy decisions.

Income

China’s real income per capita has increased 35 times from 1977 to 2023, with an annual growth rate of 8%. Our research investigates the determinants of individual income, such as education, family background, demographics, connections, ability, and policies. We also examine broader factors driving national income growth, including population, human capital, fixed capital investment, market reforms, industrialization, technology, FDI, and trade. Our research also examines income distribution, assessing whether income is rising across all groups, the trends in inequality, the impact of policies, and the intergenerational transfer of inequality. We hope our research will help reassess China's income and growth potentials and provide crucial insights for policy decisions.

Population

Arguably one of the biggest challenges for China, the total fertility rate (TFR) has significantly declined since the 1960s from 7-8 children to about 1 child per woman today, with births dropping from 27.9 million in 1970 to 9.0 million in 2023. The Demography project of CLIP aims to document population dynamics, explore causes of fertility reduction since the 1960s, and examine the long-term impacts on China's economy and society. Utilizing nationally representative data from censuses and surveys, our research seeks to inform policy discussions and offer insights into addressing China's demographic challenges.

The Highest Exam: How the Gaokao Shapes China

A new book, The Highest Exam: How the Gaokao Shapes China, offers an unprecedented look into the exam that has defined the futures of tens of millions of Chinese students—and in turn, the trajectory of modern China itself. Written by leading scholars Ruixue Jia and Hongbin Li, with writer and researcher Claire Cousineau, the book combines rigorous research with compelling personal narratives to reveal how the gaokao has become more than a test: it is a mirror of Chinese society.

Through analysis and narrative, the book illustrates how the exam system reflects broader themes in Chinese society: the pursuit of meritocracy, the tension between equality and advantage, and the state’s reliance on education to reinforce legitimacy. The authors aptly identify China’s education system as a centralized hierarchical tournament, returning to this framework in each section of the book: family, state, and society.

Media Coverage:
The Wall Street Journal: The Test that Rules Chinese Society
Kirkus Review: Book Review of The Highest Exam
The Wall Street Journal: ‘The Highest Exam’ Review: China’s Big Test
Harvard University Press: Understanding China’s Gaokao Exam
The Wire China: Hongbin Li on How the Gaokao Shapes China
China of Tomorrow Podcast: The System that Shapes China
Andrew Batson's Blog: Exams are Everything in China

The Economist selected The Highest Exam as one best books of 2025.

Gaokao: The Highest Exam

Central to China’s education system, the Gaokao stands out as the highest-stakes exam in the world, taken by over 10 million high school seniors each year. The Gaokao project within CLIP investigates the profound impact of China's college entrance exam on individuals' lives, Chinese culture, and the nation's economic and political landscape. Our research examines the historical context, institutional foundations, societal forces, and economic rationales surrounding the gaokao. By analyzing data from our Chinese College Student Survey and administrative data, we aim to reveal how this centralized, high-stakes testing system affects social mobility, career trajectories, and income inequality in China.

China Employer-Employee Survey

The China Employer-Employee Survey led by Hongbin Li continues to provide academics and policymakers access to the most comprehensive survey of Chinese manufacturing firms and their employees, including published articles on managerial behavior, productivity of state-owned enterprises, and the rise of robots in China's manufacturing sector. It is jointly initiated by researchers from Hong Kong University of Science and Technology, Stanford University, Wuhan University, and the Chinese Academy of Social Sciences.

Video: The Story Behind the China Employer-Employee Survey

Researchers