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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

    (Leibniz Institute for East and Southeast European Studies (IOS))

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.

Suggested Citation

  • Ge, Yuhao & Lehmann, Hartmut, 2013. "The Costs of Worker Displacement in Urban Labor Markets of China," IZA Discussion Papers 7327, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp7327
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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;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-14, December.
    2. He Zhu & Tsunehiro OTSUKI, 2018. "Can Two Consecutive Generations’ Data Predict Longterm Intergenerational Transition? Evidence from China with three generations," OSIPP Discussion Paper 18E004, Osaka School of International Public Policy, Osaka University.
    3. Wojciech Maliszewski & Ms. Nadia Rendak & Mr. Joong S Kang & Mr. Serkan Arslanalp & Jiangyan Yu & Ms. Longmei Zhang & Mr. Philippe Wingender & Wei Liao & Mr. Si Guo & Daniel Law & José Garrido & W. Ra, 2016. "Resolving China’s Corporate Debt Problem," IMF Working Papers 2016/203, International Monetary Fund.
    4. Gaofeng Han, 2020. "Structural transformation and its implications for the Chinese economy," Pacific Economic Review, Wiley Blackwell, vol. 25(3), pages 339-383, August.

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    More about this item

    Keywords

    propensity score matching; costs of job loss; China; worker displacement;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • P50 - Economic Systems - - Comparative Economic Systems - - - General

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