Human capital, political capital, and off-farm occupational choices in rural China

Abstract

This paper estimates the determinants of off-farm occupational choices by rural people from six counties in Shaanxi Province, with particular emphases on the comparisons between migrants and local off-farm workers. The results indicate that the positive influences of human capital on people's engagement in managerial jobs, skilled jobs and self-employment are greater for migrants than for their local peers. Political capital increases the access for local off-farm workers to white-collar jobs and self-employment, but this impact is reduced when it comes to migrants' choices. Counterfactual comparisons reveal that migrants, had they stayed locally, would be more likely to engage in occupations with high human capital requirements, and less likely to conduct self-employed business. Overall, human capital nearly plays its full role in the migration destination's labor market, while political capital remains effective in the local labor market.