Liquidity Constraint Shock, Job Search and Post Match Quality—Evidence from Rural-to-Urban Migrants in China

Yuanyuan Chen*, Zichen Deng

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

This paper studies the impact of a liquidity constraint shock on the job search behavior and outcomes among rural-to-urban migrant workers in China. A negative liquidity constraint shock significantly reduces job search duration and increases the job finding hazard rate for female migrant workers. A negative liquidity constraint shock also lowers the subsequent job match quality, including a lower hourly wage, longer working hours, a higher probability of on-the-job searches and lower quality in terms of subsidy. We find little effect on the job search process and post match quality for male migrant workers. From the policy perspective, we show evidence that rural medical insurance, namely, the New Cooperative Medical Scheme (NCMS), can actually ease the impact of a liquidity constraint shock for female migrant workers.

Original languageEnglish
Pages (from-to)332-355
Number of pages24
JournalJournal of Labor Research
Volume40
Issue number3
DOIs
Publication statusPublished - Sep 2019

Keywords

  • Job search duration
  • Liquidity constraint shock
  • Match quality
  • On-the-job-searches
  • Rural-to-urban migrants

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