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Cream-Skimmer Or Underdog? A Case Study Of Labor Type Selectivity In A Rural Labor Training Program In China

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  • YIU POR (VINCENT) CHEN

    (School of Economy & Trade, Hunan University of Technology and Business, Changsha, 410205, P R China2Labor and Worklife Program, Harvard University, USA)

Abstract

The mismatch between a laborer’s abilities and the goals set forth by a training program is one of the most pressing concerns for a labor training program. This paper looks at the incentives for a laborer to enter a rural labor training program and demonstrates a clear method of analyzing the participation issues using instrumental regressions on the data collected from a case study a “poverty city” in the Zhejiang province, China. This paper shows that a pre-program wage drop may induce workers of a higher caliber to enter the training program and cause a “cream-skimming” effect on its outcome because of the S-shaped labor supply curve for the rural population who live in poverty. The result of the cream-skimming effect enhances the traditional view that a pre-program wage drop may reduce “opportunity cost” to enter a training program. This extension can be handy to revise future designs of rural labor training programs.

Suggested Citation

  • Yiu Por (Vincent) Chen, 2020. "Cream-Skimmer Or Underdog? A Case Study Of Labor Type Selectivity In A Rural Labor Training Program In China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(supp01), pages 185-210, December.
    • Handle: RePEc:wsi:serxxx:v:65:y:2020:i:supp01:n:s021759082044004x
    DOI: 10.1142/S021759082044004X
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