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The Costs of Worker Displacement in Urban Labor Markets of China

  • Ge, Yuhao

    ()

    (Renmin University of China)

  • Lehmann, Hartmut

    ()

    (University of Bologna)

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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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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  1. Lindo, Jason M., 2010. "Parental Job Loss and Infant Health," IZA Discussion Papers 5213, Institute for the Study of Labor (IZA).
  2. 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).
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  15. 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.
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