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Does employer learning with statistical discrimination exist in China? Evidence from Chinese Micro Survey Data

Jun Wang and Bo Li

International Review of Economics & Finance, 2020, vol. 69, issue C, 319-333

Abstract: Because employers cannot perfectly recognize workers’ actual ability when recruiting, they have rational expectations for worker productivity only through considering easily observable characteristics such as education. However, with the increase in labour market experience, employers gradually learn actual productivity through historical working performance. The above phenomenon is called employer learning with statistical discrimination (EL-SD). This paper confirms that EL-SD significantly exists in the Chinese labour market based on Chinese Household Income Program (CHIP) data from 2013 and Chinese Family Panel Studies (CFPS) data from 2012 to 2014. Furthermore, EL-SD is hardly corroborated for advantaged workers such as males, college graduates, highly skilled workers, high wage earners, and workers in large businesses or the urban labour market.

Keywords: Statistical discrimination; Employer learning; Signalling; Education (search for similar items in EconPapers)
JEL-codes: I21 J31 J71 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:69:y:2020:i:c:p:319-333

DOI: 10.1016/j.iref.2020.05.021

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