Workers’ Earnings in Contemporary China: Class, Labor Market Structure, and Social Networks

• In Event: 127 - Section on Inequality, Poverty and Mobility Roundtable Session (one-hour).
  In Paper Session: Table 11. Income Inequality

Abstract

China has undergone a tremendous economic transformation since 1978 as it has made the transition from a centrally-planned command economy to a more market-oriented economy. However, there is a paucity of research that seeks to understand how these changes have affected the labor market and the earnings of ordinary Chinese workers. In this paper, we utilize the 2008 China General Social Survey (CGSS) to investigate the role of class, labor market structure, and social networks on the earnings of workers in contemporary China. We construct a version of Wright’s (2000) 12-class scheme which we modify to include the extensive peasant class as a thirteenth class position. Controlling for gender, age, education, hours of work and region, we consider several aspects of labor market structure including organization size, work unit type (government/party, institution, social organization, enterprise), ownership (state-owned, collective, privately owned domestic, foreign-owned), non-standard employment (contractor, casual labor, freelancer), hukou (the household registration system which restricts citizenship to a specific area), and Communist Party membership. Also, following Bian, Breiger, Davis, and Galaskiewicz (2005), we employ a unique measure of social networks based on vitiation patterns during Chinese New Year. Our findings suggest that each of these factors plays an important role in earnings determination among Chinese workers and our model explains over 75 percent of the variance in earnings. We conclude that earnings determination of Chinese workers has many similarities with western, market-oriented countries, but manifests uniquely Chinese characteristics.

Authors

• Qiong (Miranda) Wu, University of Connecticut

• Michael E. Wallace, University of Connecticut