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The Costs of Worker Displacement in Urban Labor Markets of China

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  • Ge, Yuhao

    ()
    (Renmin University of China)

  • Lehmann, Hartmut

    ()
    (University of Bologna)

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.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7327.

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Length: 46 pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7327

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Keywords: propensity score matching; costs of job loss; China; worker displacement;

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References

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  1. Hartmut Lehmann & Norberto Pignatti & Jonathan Wadsworth, 2005. "The Incidence and Cost of Job Loss in the Ukrainian Labor Market," Upjohn Working Papers and Journal Articles, W.E. Upjohn Institute for Employment Research 05-122, W.E. Upjohn Institute for Employment Research.
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  3. Orazem, Peter F. & Vodopivec, Milan & Wu, Ruth, 2004. "Worker Displacement during the Transition: Experience from Slovenia," IZA Discussion Papers 1297, Institute for the Study of Labor (IZA).
  4. Hartmut Lehmann & Alexander Muravyev & Norberto Pignatti & Anzelika Zaiceva, 2010. "Worker Displacement in Russia and Ukraine: A Comparative Analysis Using Micro Data," ESCIRRU Working Papers 24, DIW Berlin, German Institute for Economic Research.
  5. Alexander Hijzen & Richard Upward & Peter W. Wright, 2010. "The Income Losses of Displaced Workers," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
  6. Hartmut Lehmann & Alexander Muravyev & Tiziano Razzolini & Anzelika Zaiceva, 2011. "The Wage and Non-wage Costs of Displacement: Evidence from Russia," Center for Economic Research (RECent), University of Modena and Reggio E., Dept. of Economics 060, University of Modena and Reggio E., Dept. of Economics.
  7. Liu, Hong & Zhao, Zhong, 2011. "Parental Job Loss and Children’s Health: Ten Years after the Massive Layoff of the SOEs’ Workers in China," IZA Discussion Papers 5846, Institute for the Study of Labor (IZA).
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  14. Lehmann, Hartmut & Philips, Kaia & Wadsworth, Jonathan, 2005. "The incidence and cost of job loss in a transition economy: displaced workers in Estonia, 1989 to 1999," Journal of Comparative Economics, Elsevier, vol. 33(1), pages 59-87, March.
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Cited by:
  1. Mehtap Akgüç & Corrado Giulietti & Klaus Zimmermann, 2014. "The RUMiC longitudinal survey: fostering research on labor markets in China," IZA Journal of Labor & Development, Springer, Springer, vol. 3(1), pages 1-14, December.

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