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

Author

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  • Kuhn, Peter J.

    (University of California, Santa Barbara)

  • Shen, Kailing

    (Australian National University)

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.

Suggested Citation

  • Kuhn, Peter J. & Shen, Kailing, 2014. "Do Employers Prefer Undocumented Workers? Evidence from China's Hukou System," IZA Discussion Papers 8289, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8289
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    References listed on IDEAS

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    Cited by:

    1. You, Jing & Wang, Shaoyang, 2018. "Unemployment duration and job-match quality in urban China: The dynamic impact of 2008 Labor Contract Law," Economic Modelling, Elsevier, vol. 71(C), pages 220-233.
    2. Yang Liu, 2017. "Job Search and Labor Market Outcomes of New Graduates in China: Using the Latest Available Survey Data," Review of Economics & Finance, Better Advances Press, Canada, vol. 7, pages 66-79, February.
    3. Akgüç, Mehtap & Liu, Xingfei & Tani, Massimiliano, 2014. "Expropriation with Hukou Change: Evidence from a Quasi-Natural Experiment," IZA Discussion Papers 8689, Institute of Labor Economics (IZA).
    4. Chmura, Thorsten & Goerg, Sebastian J. & Weiss, Pia, 2016. "Natural groups and economic characteristics as driving forces of wage discrimination," European Economic Review, Elsevier, vol. 90(C), pages 178-200.
    5. Tani, Massimiliano & Xu, Lei & Zhu, Yu, 2021. "The impact of an un(der)funded inclusive education policy: Evidence from the 2013 China education panel survey," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 768-784.
    6. LIU Yang, 2016. "Employment and Starting Wages of New Graduates in China: Using the latest available survey data," Discussion papers 16021, Research Institute of Economy, Trade and Industry (RIETI).
    7. Martin Abel, 2017. "Labor market discrimination and sorting: Evidence from South Africa," SALDRU Working Papers 205, Southern Africa Labour and Development Research Unit, University of Cape Town.

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    More about this item

    Keywords

    undocumented migrants; hukou; China; temporary migration;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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