Keywords
Education
Instrumental variable
Probit model
Submitted : 2024-07-29
Accepted : 2024-08-13
Published : 2024-08-28
Abstract
This paper analyzes factors that explain company layoffs, given the individual layoff data in 2021, China. Using the Probit regression model, we find that gender inequality exists in layoffs, an employee’s work experience becomes less critical in the company’s layoff decisions, and how an employee’s health reasons affect work affects its probability of being laid off. Since we consider a significant endogeneity issue with education, using parents’ education as an instrumental variable suggests that political status cannot be a significant advantage for employees to lower the chance of being laid off. Moreover, evidence implies that policymakers encouraging the pursuit of higher educational degrees can foster stability in the labor market.
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