Employment Effects And Income Effects Of Training On Migrant Workers

As an important form of the human capital investment, training’s employment effects and income effects has always been one of the main subjects in labor economics. Based on both theoretical and empirical studies on training and by using micro econometric methods, this paper systematically analyzes employment effects and income effects of training on migrant workers in China’s urban labor market.Under the condition of a perfectly competitive labor market, human capital theory suggests that training can increase the accumulation of worker’s knowledge and skills, and then increase worker’s job opportunities and wage income. Under the framework of human capital theory, the empirical research methods of training’s effects are mainly based on a Mincer equation with training as one of the explanatory variables, one can get the training’s effects by observing the regression coefficient of training. However, due to the training’s selectivity, the correlation between training and other explain variables in equation usually causes the problem of sample selection bias. While a perfectly competitive labor market does not exist in a real economy, under the condition of imperfect competition in the labor market, the governments have to take all kinds of positive and negative measures for labor market interventions, training as a positive labor market policy, its effects can be examined through a variety of policy evaluation methods. Since the 1970 s, foreign scholars have done an extensive evaluation research on the implementation of a variety of public training programs in OECD countries; however, the conclusions of the related empirical studies have obvious differences.Due to the shortage of observed datasets of training programs for migrant workers in China, the domestic study of training’s effects on migrant workers starts late. Most of the studies focus on migrant workers’ human capital investment effects, simply join "training" as a factor of human capital in the migrant workers’ employment or income equation, then evaluate employment or income effects of training on migrant workers by analyzing the regression coefficients. Although most of the empirical results support that training plays a positive role in improving migrant workers’ employment probability and income levels, the research conclusion will inevitably exist some limitations due to the neglect of training’s heterogeneity, like different training types, contents or duration. Therefore, according to the present situation of training on migrant workers in China’s urban labor market, this paper tries to investigate the possible training effects on migrant workers’ employment, occupation choice, income and income distribution by using the micro econometric methods, and provide some policy advice for government departments to design and implement reasonable and targeted training programs on migrant workers.First, based on the data of Rural-Urban Migration in China in 2007 and 2008, we establish the equations of migrant workers’ employment and employment changes, to analyze the effects of general and specific training on migrant workers’ employment probability, employment inflow probability and employment outflow probability. The results show that training will help boost the enthusiasm of migrant workers employed in urban labor market, migrant workers who recieve general training and specific training will lead to their employment probability increased by 1.7% and 4.7% respectively, larger than the employment probability increased due to the normal school education, therefore, training is an effective way to promote the employment of migrant workers. From the two dimensions of migrant workers’ employment inflow and employment outflow during the period 2007-2008, the results show that both general and specific training can significantly promote migrant workers’ employment inflow, and significantly inhibit the migrant workers’ employment outflow. The positive influence of general training on employment inflow is larger than specific training, while the negative influence of specific training on employment outflow is larger than general training; due to the two types training programs’ emphasized aspects on enhancing migrant workers’ skills are different. Therefore, the government department should formulate reasonable and targeted training policy combined with the employment situation of migrant workers, provide more general training for the unemployed migrant workers, in order to increase their employment space and opportunity choice, prompt them to look for a job as soon as possible in urban labor market; implement specific training related to some specific work content for the employed migrant workers, in order to improve their professional skills levels, then strengthen migrant workers’ employment stability.Secondly, based on the data of Rural-Urban Migration in China in 2008, we establish a multi Logit model of migrant workers’ occupation choice, and use propensity score match(PSM) to analyze the influence of general training and specific training on migrant workers’ occupation choice. The results show that training can help migrant workers engaged in occupations with higher occupational prestige and social status, general training can significantly improve the probability of migrant workers employed as a clerk(about 2.6%), specific training can significantly improve the probability of migrant workers employed as a manager or a professional and technical personnel(about 3.1%). In the face of the shortage of skilled talents called "labor shortage" phenomenon in China’s urban labor market, government departments need to take relevant solutions, strengthen the rural basic education investment, at the same time, develop relevant training subsidy and support policy for migrant workers, will help improve migrant workers’ knowledge and skills levels, thus promote migrant workers’ occupational upgrade.Thirdly, based on 2007 Jilin province migrant workers survey data, this paper selects sample using a systematic sample selection method, and analyzes income effects of training on migrant workers using Horvitz-Thompson estimator. The results show pre-job training and on-the-job training improve the income of migrant workers by 18.38% and 9.45% respectively; migrant workers who receive both pre-job and on-the-job training will have an income increase by 20.24%, significantly greater than the return rate of education. Therefore, training is an effective way to increase migrant workers’ income, the long-term effect of training on migrant workers’ income is larger than the short-term effect. The government and the enterprises should enlarge training investment, expand training coverage, and develop training programs for migrant workers, which can help increase their income levels and prompt the well-organized rural-urban migration of rural surplus labor force. By using the systematic sample selection method to select the sample of migrant workers systematically, we effectively reduce the standard deviation of income effects of training on migrant workers, so as to improve the accuracy of the estimated results.Fourthly, based on the data of Rural-Urban Migration in China in 2008, this paper analyzes income effects of the general and specific training length on migrant workers. The results show: both general and specific training help improve the income level of migrant workers. If migrant workers receive a moderate amount of general and specific training, their income levels will increase by 54% and 21% respectively, larger than the education return rate. Therefore, the government and the enterprises implement all kinds of general and specific training programs will help the migrant workers’ income levels significantly increased. The marginal income effect on migrant workers will diminish with the extension of training length. The income level of migrant workers who receive general training within 30 days or specific training within 120 days will be significantly improved with the extension of training length, while there will not be a further improvement of income level when receiving general or specific training for more than 30 days or 120 days. Therefore, in the process of designing training programs, the government and the enterprises need to consider the implementation of the training program efficiency, adjust the training length appropriately, avoid excessive training phenomenon.Finally, based on the data of Rural-Urban Migration in China in 2008, this paper uses quantile treatment effect model to estimate the training return on the migrant workers’ income distribution. The results show that both general and specific training significantly enhance the income level of migrant workers, the migrant workers’ average income increase rate due to specific training is larger than general training. At the low quantile of migrant workers’ income distribution, the income effect of both general and specific training is the largest, with the increasing of quantiles, the income effect of general training shows a change trend of rising down before, but the overall change is small, on the 50 quantile of the income distribution, the income effect of general training is the smallest. With the increasing of quantiles, the income effect of specific training shows a declined trend, and the change is large. On all quantiles between the 10 quantile and the 70 quantile, the income effect of specific training is higher than general training, on the 90 quantile; the income effect of general training is slightly higher than specific training. Therefore, compared with high-income group of migrant workers, both general and specific training have larger income effects on low-income groups, the effect of general training on high-income group is slightly larger than specific training, on all other quantiles of migrant workers’ income distribution, the effects of specific training are significantly larger than general training. The government should combine with the employment situation and income distribution of migrant workers in China’s urban labor market, formulate and implement more targeted training policy for migrant workers, so as to promote the overall migrant workers’ income levels improved.The results in this paper will help us understand the decision mechanism of the migrant workers’ employment and income in China’s urban labor market. It will also help government formulate and implement more rational labor market public policy.