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Liquidity Constraint Shock, Job Search and Post Match Quality—Evidence from Rural-to-Urban Migrants in China

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  • Yuanyuan Chen

    (Shanghai University of Finance and Economics)

  • Zichen Deng

    (Vrije Universiteit Amsterdam
    Tinbergen Institute)

Abstract

This paper studies the impact of a liquidity constraint shock on the job search behavior and outcomes among rural-to-urban migrant workers in China. A negative liquidity constraint shock significantly reduces job search duration and increases the job finding hazard rate for female migrant workers. A negative liquidity constraint shock also lowers the subsequent job match quality, including a lower hourly wage, longer working hours, a higher probability of on-the-job searches and lower quality in terms of subsidy. We find little effect on the job search process and post match quality for male migrant workers. From the policy perspective, we show evidence that rural medical insurance, namely, the New Cooperative Medical Scheme (NCMS), can actually ease the impact of a liquidity constraint shock for female migrant workers.

Suggested Citation

  • Yuanyuan Chen & Zichen Deng, 2019. "Liquidity Constraint Shock, Job Search and Post Match Quality—Evidence from Rural-to-Urban Migrants in China," Journal of Labor Research, Springer, vol. 40(3), pages 332-355, September.
    • Handle: RePEc:spr:jlabre:v:40:y:2019:i:3:d:10.1007_s12122-018-9278-7
    DOI: 10.1007/s12122-018-9278-7
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    More about this item

    Keywords

    Liquidity constraint shock; Job search duration; Match quality; On-the-job-searches; Rural-to-urban migrants;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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