Education,Search Model And The Problem Of China's Urban Employment

This paper focuses on the effect of education on employment. The research on employment can trace back to classicalism, but the employment theory formed in the 1930s when the crisis happened. In the 1970s, sticky wage theory and search and matching theory appeared, which have developed and advanced the employment theory greatly. Recently, China's unemployment and laid-off problem has become more and more serious. In order to alleviate the serious social pressure on employment, some scholars have suggested that we should broaden the scope of education and heighten the education level of labors. In fact, both the human capital theory and the screening and signaling theory regard that the labor forces who is well-educated can enjoy more employment opportunity, higher income and higher social status.However, people find that the effect of education on employment and re-employment is limited. Through the survey on re-employment state of laid-offs in China, we are astonished to see the phenomenon of "education failure". Why will the reality be deviated from the theory? What does it happen? How to improve it? This is the issue that this paper focus.This paper discusses the problem from the aspect of theoretic and empirical analysis. It explores that education can play an important role in a perfect market. However, China's Labor market is imperfect. Some factors may impede the mobility of labors, such as the rising searching cost, the segment labor market and the asymmetric information, and the appropriability of human capital etc.This paper can be divided into four parts. The first part introduces the latest development of employment theory, and explores the relation between education and employment in the traditional economic theory.The second part builds a two-section search model including education and employment, which follows the basic frame of Pissarides(1985, 1994). The model shows that in a perfect labor market, the more education one accepts, the lower probability of unemployment and the higher income he will face. The rate of unemployment will reduce when the number of educated labors increases, or the ratioof vacant-searcher in high-efficiency section goes up.The third part makes some empirical analysis. Through the analysis, we find that the rising of average education level and the proportion of the tertiary industry in the GDP can increase the employment in the society. However, there is not remarkable linear relevant relation between the labor's education level and their probability of unemployment o At the same time, high-quality population contribute little to employment.Finally, this paper puts forward the corresponding policies and measures. This paper reaches to some conclusions that we should improve the labor market, carry on the adjustment of economic structure, reduce the labor's professional conversion cost, and train the laid-offs.