Job Placements And Job Shifts In China: The Effects Of Education, Family Background And Gender

The Effects of Education, Family Background and Gender

Lijuan Wu

• Publisher: WSPC
• Year: 2014
• ISBN:
  9789814579261
• Topic: Ciencias biológicas
• Subtopic: Ciencias en general

The book investigates the impact of the market-oriented economic reform in China on a unique aspect of the labor market outcomes — individuals' access to different employment sectors, that is, the state and collective sector, the private sector, and the sector of family contract farming in the 1990s. Using the longitudinal data of China Health and Nutrition Survey, the author finds that the access to different employment sectors is not equally distributed among Chinese workers during the market transition. And the hierarchy of employment sectors is reproduced through the procedure that assorts individual workers to different employment sectors. In addition to achieved characteristics such as human capital, ascribed characteristics such as family background and gender are important factors in understanding the procedure of social stratification in the reform era. The book will be of value to social scientists interested in the market transition of socialist societies in general and the social transformation of contemporary China in particular.

Contents:

• Introduction
• The Structure of Employment Sectors in China
• Literature Review and Research Hypotheses
• Data and Methods
• Where to Start? Job Placement Across Employment Sectors Among Young Workers
• To Change or Not to Change? Job Shifts Across Employment Sectors Among Older Workers
• Conclusion and Discussion

Readership: Graduates, academics and professionals who are interested in Chinese economic reform, social stratification and mobility, social transformation, and labor market.

Chapter 1

Introduction

The market-oriented economic reform since 1979 has conspicuously transformed the institutional structure of China’s economy. Prior to the reform, China was featured as a state-socialist economy. The agricultural production was collectivized and the nonagricultural production was nationalized. More importantly, the government played a central role in the economy through its control on the productions and sales of almost all the agricultural and nonagricultural products. The private sector barely existed in the economy (Parish and Whyte 1978; Riskin 1987; Selden 1993; Whyte and Parish 1984). The reform has diversified the economic institutions of China’s economy by introducing the market economy.

At the very early stage of the economic reform, the collective agricultural production has been dismantled. The farmers’ households have become the unit of production since then and are in full charge of the farming land that is contracted to them (Knight and Song 1999). In the meantime, the government encouraged the development of small private businesses in both urban and rural areas with caution. The private sector gradually revived during the economic reform period, and the government eventually legitimized the private ownership of businesses, small or large (Garnaut and Song 2004). Nevertheless, unlike the Eastern European countries, China does not take its state-owned and collective enterprises down to the route of mass privatization. Instead, reforms from inside had been the approach to improve the performance of the state-owned and collective enterprises during the first 15 years of the reform. Even after the large-scale ownership reform began in the mid 1990s, many enterprises with good economic performance remain to be state or collectively owned (Lardy 1998). As a result, the state-socialist economy and the market economy coexist in contemporary China. And the proximity to the market economy varies among the economic sectors.

Clearly, having been growing outside the economic planning system of the government, the private sector is closest to the market economy. Family farming seems to be under the market economy except that the land is still owned by the government and equally distributed among farmers’ households. In addition, the agricultural production has to bear the burden of “urban bias” resulting from the government’s macroeconomic policies for development. Since the state and collective sectors are inherited from the pre-reform era, they have maintained many features of the state socialist economy and may be the farthest from the market economy. To put it together, the private sector, the sector of family farming, and the state/collective sector are three segments that operated under different institutional arrangements in China’s economy.

The transformations of the economic institutions during the economic reform era have three implications on the process of social stratification and mobility in China. First, the transformations have reshaped the structure of the employment sectors, which was an important dimension of social stratification in the pre-reform era. The establishment of the family farming system and the emergence of the private sector provide new opportunities outside the old system. Moreover, the different institutional arrangements have affected the monetary and nonmonetary rewards to individuals working in each sector. Family farming still suffers from the “urban bias” of the development policies and therefore is the least rewarding sector in terms of income. The state/collective sector is to a large extent subject to the wage rates set by the government. Relatively, the private sector offers more competitive salaries. However, the workers of the state/collective sector enjoy many latent benefits such as subsidized housing, health care, and pension plan. The lifetime employment was guaranteed in the state/collective sector until the mid 1990s. For farmers’ households, they may keep the land allocated to them as long as they continue working on it. Therefore, due to different institutional arrangements, each sector provides to its workers a different package of rewards that puts different weights on income, latent benefits, and security. The variations of the rewarding systems among the state/collective sector, the private sector, and the sector of family farming suggest that the employment in different sectors means different structure of opportunities. The access to different sectors is therefore important for understanding social stratification in the reform era.

Secondly, the introduction of the market economy has changed the mechanisms of the social stratification in the reform era. The market transition theory argues that the market-oriented economic reform will shift the control over resources progressively from political disposition to market institutions. Consequently, human capital, which is valued in the market economy, will become more important in the process of social stratification in China (Nee 1989; Nee 1996). In addition, the economic reform has renewed the role of family in economic activities (Entwisle et al. 2000). On the one hand, the family may serve as the pool of social capital to facilitate the economic advancement of each family member. On the other hand, the family may coordinate the labor forces of its members in order to maximize the utility of the family as a whole. Moreover, the demand for female labor has been affected by the economic reform. While the expansion of market economy may have produced more work opportunities for women, the discrimination against women in the labor markets may have also risen due to the declining role of the government in promoting gender equality in the workplaces (Bian 2002; Whyte 2000). It seems that the major mechanisms of social stratification — human capital, family background, and gender — have experienced some changes during the economic reform era. Therefore, it is necessary to examine the influences of those factors on configuring the social stratification of contemporary China.

Thirdly, the economic reform has eroded the rigorous labor system and led to the rise of the labor market (Meng 2000; Tomba 2002), which increases the opportunities of social mobility via job mobility. Before the economic reform, both the urban and rural labor forces were under close administration of central and local governments through the rural collectives and urban work organizations. Labor markets did not exist and job mobility across employment sectors was rare. Since the economic reform, the resurrection of the private sector in the economy has been increasingly providing nonagricultural job opportunities that are beyond government control. The reestablishment of farmers’ households as the unit of agricultural production essentially liberates the rural labor forces from the control of the collective. The reforms of the state-owned and collective enterprises have been gradually relieving the workers’ dependency on their work organizations. Labor markets have started to emerge in China’s economy and job mobility is more common during the reform era.

In the context of China’s market-oriented economic reform, the aim of this book is to understand how the three mechanisms of social stratification — education, family background, and gender — have influenced the access to the state and collective sectors, the private sector, and the sector of family farming during the economic reform era. Specifically, I address the following major questions:

1. Is there any differentiation on the access to different employment sectors among individuals with different levels of educational achievement? Has the influence of education increased as the economic reform proceeds?
2. Does family background affect individuals’ chances to access different employment sectors? If so, is it a social capital effect or an effect of family coordination? Has the effect of the family background declined when the market economy expands?
3. Is there any gender difference on the access to different employment sectors? Has the gender effect changed with the evolution of the economic reform?

To answer the research questions, this research uses the longitudinal data obtained from the first wave (1989) and the fourth wave (1997) of the China Health and Nutrition Survey (CHNS).¹ Recognizing that entering an employment sector at the very early stage of one’s career is different from transferring to an employment sector from another sector at the later stage of the career, I do separated analysis on the job placement of young workers (age 17 to 24) and the job mobility of older workers (age 25 to 44).

This book contributes to the debate on how the market transition has been changing the process of social stratification in China in the following aspects. Theoretically, the debate is concentrated on the rising influence of human capital and the declining power of political capital in determining the socioeconomic status of individuals (Cao and Nee 2002; Nee 1989; Nee 1991; Nee 1996; Walder 2002; Wu and Xie 2003; Xie and Hannum 1996; Zhou 2000a). Other mechanisms of social stratification are largely ignored in the debate. This research views family background and gender as equally important as human capital in the social stratification in contemporary China. In addition, the majority of the empirical studies developed around the debate focus on one specific outcome of social stratification, that is, income inequality. However, considering that the labor markets in China are essentially segmented (Bian 1994) and the entrance into the core sectors constitutes the primary goal of status attainment (Lin and Bian 1991), it is necessary to investigate the procedure that sorts individuals into different positions of the labor markets. This research attempts to fill the gap by focusing on job placement and job shift across employment sectors as the outcome variables.

The remainder of the book is organized as follows. Chapter 2 introduces the contextual setting of the research. I first review the establishment of the hierarchy of employment sectors through a series of economic and social institutions under the state-socialist economy. Then I introduce the transformations of the employment sectors via institutional innovation and modification during the reform era. Finally I discuss how the economic reforms may have affected the structure of the employment sectors in contemporary China and the implications on social stratification in the reform era.

Chapter 3 discusses the theoretical background of the research and develops a series of the research hypotheses. I begin with the theory of labor market segmentation and the market transition debate. Then I review the effects of education, family background, and gender on job placement and job mobility, which is followed by the research hypotheses.

Chapter 4 describes the data, analytical samples, dependent, independent and control variables, and statistical methods used in the empirical analysis of the research.

Chapter 5 presents the results of the bivariate and multivariate analysis on the job placement across employment sectors among the youths aged 17 to 24. At first, I discuss the change of young workers’ employment sectors over time. Then the effects of education, family background, and gender on the entry of different employment sectors are examined. In addition, the change of those effects over time are investigated. Lastly, the effects of control variables are also discussed briefly.

Chapter 6 talks about the results of the bivariate and multivariate analysis on job shifts across employment sectors among workers aged 25 to 44. The overall mobility rate and the differentiations of cross-sector mobility rate by original employment sectors are first discussed. The directions of the cross-sector job mobility are also examined. Then I discuss the effects of education, family background, and gender on the overall mobility rate and the direction of the job shifts across employment sector. The effects of control variables are briefly presented at the end of the chapter.

Chapter 7 draws conclusions on the patterns of job placement and job shifts across employment sectors in China. The implications of the findings on the social stratification of China in the future are discussed.

 

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¹This research uses data from China Health and Nutrition Survey (CHNS). We thank the National Institute of Nutrition and Food Safety, China Center for Disease Control and Prevention, Carolina Population Center, the University of North Carolina at Chapel Hill, the NIH (R01-HD30880, DK056350, and R01-HD38700) and the Fogarty International Center, NIH for financial support for the CHNS data collection and analysis files from 1989 to 2006 and both parties plus the China-Japan Friendship Hospital, Ministry of Health for support for CHNS 2009 and future surveys.

Chapter 2

The Structure of Employment Sectors in China

This chapter will first review the institutionalization of the hierarchy of the employment sectors in China from 1949 to 1978. Next, the transformation of the old employment sectors and the emergence of the new sectors since the launch of the economic reform in 1979 are examined in details. At the end, the possible impacts of the reform on the structure of the employment sectors and therefore the process of social stratification are discussed.

The Hierarchy of Employment Sectors in the Pre-Reform Era

China’s employment system under the state-socialist economy before the economic reform was characterized by immense disparity and high-degree segmentation of the agricultural (rural) and nonagricultural (urban) sectors. The nonagricultural sector was no doubt superior to the agricultural sector in terms of income, benefits, and prestige. The divide between the agricultural and nonagricultural sectors was formalized during the mid and late 1950s, shortly after the inauguration of the socialist regime in 1949. A series of institutions have contributed to the establishment and continuity of such a hierarchy of the employment sectors in pre-reform China. Fundamentally, the inequality between the agricultural and non-agricultural sector was the consequence of the government’s development strategy of focusing on the rapid growth of industry, especially heavy industry. As to the segregation of the employment in the agricultural and nonagricultural sectors, the collectivization of agriculture in rural areas and the nationalization of industry and commerce in urban areas have put the labor force of the country under the full control of the government. In addition, the nationwide household registration (hukou) system and the rationing of basic necessities in urban areas successfully limited the geographical mobility of the population, especially from rural to urban areas.

The development strategy of the Chinese government after 1949 was to promote rapid industrialization in urban areas. Guided by this strategy, the government’s investment in agriculture and agriculture-related industries was never high. Its share in the total national investment hit the highest point (21.3%) in 1962 immediately after the famine, but it gradually fell to about 10 percent in 1975 (Riskin 1987). Moreover, to control the cost of food and other raw materials for urban industrial growth, the Chinese government deployed the compulsory procurement system in 1953 to buy agricultural products from farmers at a low price (Chan 1994). Resulting from this discrimination, there was a large income gap between agricultural and nonagricultural sectors on the eve of the economic reform (Riskin 1987). Estimates of pre-reform personal incomes in China put the average urban-rural per capita income ratio in 1978 between 2.5 and 3 to 1, excluding the urban subsidies in urban incomes. The ratio rises to about 6 to 1 after including the subsidies in the estimates of income. Additionally, the social security system (e.g. medical insurance, pension, and paid maternity leave) was only available to employees of the nonagricultural sector (United Nations Development Programme 1999). The distinct superiority of the nonagricultural sector inevitably created a desire among farmers to move to the urban nonagricultural sector (Parish and Whyte 1978). However, the mobility across employment sectors was extremely low in pre-reform China because of the full control of the labor force by the government in both rural and urban areas.

Under the collective agricultural production (Knight and Song 1999; Parish and Whyte 1978; Riskin 1987; Selden 1993), land became the property of the collective. Besides, draft animals, large farm implements, orchards, fishponds, and forestry were collectivized with a small amount of compensation paid to the individual owners. Corresponding to the ownership of the means of production, the collective was responsible for following the government’s regulations on the production an...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• Editorial Committee
• Acknowledgments
• List of Tables
• List of Figures
• Chapter 1: Introduction
• Chapter 2: The Structure of Employment Sectors in China
• Chapter 3: Literature Review and Research Hypotheses
• Chapter 4: Data and Methods
• Chapter 5: Where to Start? Job Placements Across Employment Sectors Among Young Workers
• Chapter 6: To Change or Not to Change? Job Shifts Across Employment Sectors Among Older Workers
• Chapter 7: Conclusion and Discussion
• References
• Index