Discrimination again Rural Migrants and Labor Market Mismatch—A General Equilibrium Based Explanation
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| Title | Discrimination again Rural Migrants and Labor Market Mismatch—A General Equilibrium Based Explanation
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| Author | Xun Chen and Shu Xu |
| Organization | College of Econimics, JiNan University;School of Economics, Southwestern University of Finance and Economics |
| Email | xunchen15@hotmail.com；xushu@swufe.edu.cn |
| Key Words | hukou system; rural-urban migrant; discrimination; labor market |
| Abstract | While the existence of wage discrimination in urban labor market against rural migrants has already been well studied, its economic mechanism and consequences on labor market are still unclear. We develop a statistical discrimination model in this paper and structurally estimate the model using micro data. By doing this, we present the inherent mechanism of wage discrimination against rural migrant, as well as its effects on urban labor market. We show that statistical discrimination, as a result of imperfect information, does exist in China’s urban labor market. It suppressed migrants’ investment on human capital and the chance of being assigned to high-income job, hence lowering their wage. Also, statistical discrimination leads to severe mismatches between tasks and skills, which is estimated to be 34.15%. Counterfactual simulation indicates that in a society without identification of hukou, the mismatch rate in urban labor market could be decreased by 9.2%. |
| Serial Number | WP1284 |
| Time | 2018-07-05 |
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