Do Employers Prefer Undocumented Workers? Evidence from China's Hukou System

35 Pages Posted: 5 Jul 2014

See all articles by Peter Kuhn

Peter Kuhn

University of California, Santa Barbara (UCSB) - Department of Economics; IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

Kailing Shen

Xiamen University; IZA Institute of Labor Economics

Abstract

We study urban Chinese employers' preferences between workers with and without a local residence permit (hukou) using callback information from an Internet job board serving private sector employers. We find that employers prefer migrant workers to locals who are identically matched to the job's requirements; these preferences are especially strong at low skill levels. We argue that migrants' higher work hours and effort help to account for employers' preferences, and present evidence that efficiency wage and intertemporal labor substitution effects might explain these hours/effort gaps.

Keywords: temporary migration, China, hukou, undocumented migrants

JEL Classification: O15, R23

Suggested Citation

Kuhn, Peter J. and Shen, Kailing, Do Employers Prefer Undocumented Workers? Evidence from China's Hukou System. IZA Discussion Paper No. 8289, Available at SSRN: https://ssrn.com/abstract=2462721

Peter J. Kuhn (Contact Author)

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

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IZA Institute of Labor Economics

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National Bureau of Economic Research (NBER)

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Kailing Shen

Xiamen University ( email )

Xiamen, Fujian 361005
China

HOME PAGE: http://www.wise.xmu.edu.cn/faculty/shen

IZA Institute of Labor Economics

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Germany

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