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

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  • Margaret Maurer-Fazio

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.

Suggested Citation

  • Margaret Maurer-Fazio, 2002. "The Role of Education in Determining Labor Market Outcomes in Urban China's Transitional Labor Markets," William Davidson Institute Working Papers Series 459, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2002-459
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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/39843/3/wp459.pdf
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    References listed on IDEAS

    as
    1. John Knight & Song Lina, 1993. "Why Urban Wages Differ in China," Palgrave Macmillan Books, in: Keith Griffin & Zhao Renwei (ed.), The Distribution of Income in China, chapter 7, pages 216-284, Palgrave Macmillan.
    2. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    3. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, February.
    4. Appleton, Simon & Knight, John & Song, Lina & Xia, Qingjie, 2002. "Labor retrenchment in China: Determinants and consequences," China Economic Review, Elsevier, vol. 13(2-3), pages 252-275.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Giles, John T. & Wang, Dewen & Cai, Wei, 2011. "The Labor Supply and Retirement Behavior of China's Older Workers and Elderly in Comparative Perspective," IZA Discussion Papers 6088, Institute of Labor Economics (IZA).
    2. John Giles & Albert Park & Fang Cai, 2003. "How has Economic Restructuring Affected China’s Urban Workers?," William Davidson Institute Working Papers Series 2003-628, William Davidson Institute at the University of Michigan.

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    More about this item

    Keywords

    China; human capital; Lay-offs; education; labor;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • I20 - Health, Education, and Welfare - - Education - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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