| Abstract | Using household survey data covering 20-year period from 1988 to 2007, this paper analyzes the dynamic evolution of employment relations in urban China, and investigates the changes of composition of employment relations, the factors contributing to the composition changes, and the relative importance of these factors. Our results based on the multinomial logit model show that human capital, demographic characteristics, work unit characteristics and macro-economic characteristics all have significant effect on the employment relations. We find that human capital is positively related to the stable employment relations. Applying extended Oaxaca-Blinder decomposition technique, we find that for the employment relations composition change from 1995 to 2002, both the effect of the characteristics and effect of the coefficients are important; while from 2002 to 2007, the effect of coefficients, which reflects the unexplained part caused by institutional changes, becomes more important, and the effects of human capital become less important. |