Reemployment of dislocated workers in urban China: The roles of information and incentives

Using original survey data from China, we estimate a discrete duration model to study the reemployment of urban workers who lost jobs involuntarily during the restructuring of China's state sector. Taking the number of relatives living in the same city as an exogenous measure of social networks, we provide empirical evidence of the importance of these networks in job search. In contrast to studies of other transition economies, our results suggest that access to unemployment subsidies reduces the probability of reemployment within a year by 34 percent for men. Unlike men, women's reemployment is not responsive to public subsidies, although it is responsive to family circumstances. Women with children of college age are reemployed faster, especially if the local community provides employment referral services, while women with older adult children are less likely to be reemployed within a year. Journal of Comparative Economics 34 (3) (2006) 582-607. Michigan State University; University of Michigan; Institute for Population and Labor Economics, Chinese Academy of Social Sciences.