The Costs of Worker Displacement in Urban Labor Markets of China

Yuhao Ge () and Hartmut Lehmann ()
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Yuhao Ge: Renmin University of China

No 7327, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper analyzes the costs of job loss in China, using unique new data from the Rural-to-Urban Migration in China (RUMIC) data set for the year 2009. We investigate conventional labor market outcomes upon displacement like the length of unemployment spells, hours worked and monthly earnings. We also analyze whether displaced workers are more likely to be in informal employment relationships or self-employed or less happy than their non-displaced counterparts. We also look at health and psychic costs as additional outcomes. Displaced migrant workers do not encounter losses in terms of longer unemployment spells or wage penalties, while urban displaced workers incur very large costs in terms of these two outcomes. These results point to segmented urban labor markets in China. All displaced workers have an increased likelihood of being informal, while only migrants among the displaced experience a lowered incidence of self-employment. Also, health costs and psychic costs can be linked to displacement although these costs are not prevalent in a uniform fashion. Stratification of the data by gender, level of development and ownership seems important as it shows substantial heterogeneity of the costs of job loss across these dimensions.

Keywords: propensity score matching; costs of job loss; China; worker displacement (search for similar items in EconPapers)
JEL-codes: J64 J65 P50 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2013-04
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Citations: View citations in EconPapers (6)

Published - puplished in: IZA Journal of Labor and Development, 2013, 2, Article 4

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Related works:
Journal Article: The costs of worker displacement in urban labor markets of China (2013)
Working Paper: The Costs of Worker Displacement in Urban Labor Markets of China (2013)
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