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The Role of Education in Determining Labor Market Outcomes in Urban China's Transitional Labor Markets

  • Margaret Maurer-Fazio

    ()

Chinese urban workers are no longer shielded from market forces. They are bearing the brunt of the adjustment costs as enterprises shed redundant workers. This paper focuses on the role of education in determining labor market outcomes in China's rapidly changing urban labor environment. The empirical work, based on enterprise and worker survey data gathered in the fall of 1999 and spring of 2000, demonstrates that education is a key determinant of labor market outcomes. Educational attainment is an important and significant factor in the lay-off decision-the more education a worker has the better his/ her protection from lay off. Similarly, the more education a worker has the better his/her chances of finding new employment once laid off. The human capital accumulation of re-employed workers is rewarded more, as measured in terms of incremental earnings for each additional year of schooling, than that of continuously employed workers.

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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 459.

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Length: 28 pages
Date of creation: 10 Apr 2002
Date of revision:
Handle: RePEc:wdi:papers:2002-459
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  1. Appleton, Simon & Knight, John & Song, Lina & Xia, Qingjie, 2002. "Labor retrenchment in China: Determinants and consequences," China Economic Review, Elsevier, vol. 13(2-3), pages 252-275.
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