The Impact of Retrenchment and Reemployment Project on the Returns to Education of Laid-off Workers

Authors: Li, Lefu1,Wen, Wen2,and Wu, Dong3

Affiliation: 1School of Economics and Management, Tsinghua University, Beijing: 100084
         2Department of Education, Oxford University, OX2 6JF, UK
         3School of Economics and Management, Tsinghua University, Beijing: 100084

Abstract: Public ownership has been theoretically justified as segmentation in the labour market, which may depress wage and maintain a low return to education. However, lot of evidence in 1990s demonstrates the variance of returns to education in public and private ownership. Through the data in 2002, we also testify that having been laid-off or xiagang reduces the value of human capital among reemployed workers, which only accounted for a little proportion of millions retrenched workers. When those who had different quality of human capital or being influenced by the planning economy were forced to quite the labour market, the common view of higher returns in a transitional economy will be carried out. Another outcome was the new entrants would enjoyed more recourses in the terms of high returns to their education but the laid-off workers only had a miserable life.

Key words: Returns to education, laid-off workers, unemployment.

Page : 13-19    Vol.3, No. 2, 2008