The Role of Education in Determining Labor Market Outcomes in Urban China's Transitional Labor Markets

28 Pages Posted: 8 Nov 2002

See all articles by Margaret Maurer-Fazio

Margaret Maurer-Fazio

Bates College - Department of Economics; IZA Institute of Labor Economics

Date Written: April 10, 2002

Abstract

Chinese urban workers are no longer shielded from market forces. They are bearing the brunt of the adjustment costs as enterprises shed redundant workers. This paper focuses on the role of education in determining labor market outcomes in China's rapidly changing urban labor environment. The empirical work, based on enterprise and worker survey data gathered in the fall of 1999 and spring of 2000, demonstrates that education is a key determinant of labor market outcomes. Educational attainment is an important and significant factor in the lay-off decision - the more education a worker has the better his/her protection from lay off. Similarly, the more education a worker has the better his/her chances of finding new employment once laid off. The human capital accumulation of re-employed workers is rewarded more, as measured in terms of incremental earnings for each additional year of schooling, than that of continuously employed workers.

Keywords: China, human capital, lay-offs, education, labor

JEL Classification: J23, J31, J63, I20, O15, O53, P23

Suggested Citation

Maurer-Fazio, Margaret, The Role of Education in Determining Labor Market Outcomes in Urban China's Transitional Labor Markets (April 10, 2002). William Davidson Institute Working Paper Number 459. Available at SSRN: https://ssrn.com/abstract=313189 or http://dx.doi.org/10.2139/ssrn.313189

Margaret Maurer-Fazio (Contact Author)

Bates College - Department of Economics ( email )

276 Pettengill Hall
4 Andrews Road
Lewiston, ME 04240
United States
207-786-6087 (Phone)
207-786-8338 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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