In Books One Finds a House of Gold: education and labor market outcomes in urban China

Data from a 1999–2000 survey of urban workers are employed here to examine the role of education and other factors in both preventing lay-offs and obtaining re-employment. The data are also used to compare the effect of education on the earnings of re-employed workers to that of workers who have never been laid off. The empirical results demonstrate that by the late 1990s education had become a key determinant of successful labor market outcomes. The more education a worker had, the less likely he or she was to be laid off. Similarly, the more education a worker had, the better his or her chances of finding new employment once laid off. Interestingly, the education of workers who experienced a lay-off and then found new employment was rewarded more, in terms of incremental earnings for each additional year of schooling, than that of continuously employed workers.