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

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  • Wang, Jun
  • Li, Bo

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.

Suggested Citation

  • Wang, Jun & Li, Bo, 2020. "Does employer learning with statistical discrimination exist in China? Evidence from Chinese Micro Survey Data," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 319-333.
    • Handle: RePEc:eee:reveco:v:69:y:2020:i:c:p:319-333
    DOI: 10.1016/j.iref.2020.05.021
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    More about this item

    Keywords

    Statistical discrimination; Employer learning; Signalling; Education;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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