Hukou and Graduates’ Job Search in China*

This paper presents evidence that graduates from rural areas, classified as non‐urban Hukou, choose to invest in higher levels of job‐search effort (as measured by number of different search methods used and the number of employers contacted) and also set a lower reservation wage, reflected in acceptance of a lower starting salary, than do comparable graduates of urban Hukou, in China. The former also appear to have higher probabilities of being employed, in terms of both their higher probabilities of receiving offers and, more importantly, their higher probabilities of acceptance. The evidence thus suggests that graduates with non‐urban Hukou face more intense pressure to gain employment in the period leading up to graduation, than do their urban counterparts. More generally, the evidence suggests that effort invested in job search is rewarded in the graduate labor market in China.