1.Background

The problem of informal employment arose along with China’s reform and opening-up policy. In the era of planned economy，under the policy of “high employment but low income”，about 80% of urban laborers were employed in government and state-owned enterprises，and the rest were employed mostly in collective economy（Cai Fang，2004）. At the same time，all the rural labor force participated in collective production，such as agricultural production，poultry and livestock industry and other sideline production，under the control and management of People’s Commune，which did the labor-management，protected laborer’s rights and ensured reasonable income. In this way，nearly all the laborers were em