The State as Institutional Asset: Public Employment and Household Net Worth Premium in China

• In Event: Economic Sociology Section Roundtables
  In Refereed Roundtable (60 minute): Roundtable 12: Intersecting Inequalities

Abstract

This paper examines how the legacy of state socialism continues to shape wealth inequality in post-transition China. Using nationally representative data from the 2013 and 2015 China Household Financial Surveys, we find a clear and persistent wealth premium among public-sector employees that remains significant after controlling for education, occupation, and other characteristics. The results point to three reinforcing mechanisms: redistributive power through party membership and cadre hierarchy, market power through firm listing and industry position, and behavioral differences in income, debt, and expenditure. These findings suggest that the public sector functions as a hybrid institution combining administrative protection with partial market participation. Unlike the Eastern European cases where privatization eroded state influence, China’s public sector continues to organize wealth accumulation through employment and credit access. The enduring wealth advantage of public employment shows that the “hand of the state” remains active in shaping post-socialist inequality.

Authors

• Xiaoguang Fan

• Junchao Tang, University of Michigan-Ann Arbor