Abstract
The rise of inequality in China is one of the most serious social problems in the reform era in China. Previous studies have debated the relative importance of human capital, political capital, and other factors in determining personal income. Using a new dataset from 2006 China General Social Survey (CGSS, 2006), the first author replicates earlier tests to measure whether the market or state has more impact on incomes as a way to the competing hypotheses related to human versus political capital. The results of the ordinary least squares regression analysis show no significance in party membership, state ownership, and work experience, while the first author does find high returns to education, which supports Nee’s market transition theory. Moreover, the findings indicate that market sectors, including domestic private enterprises and foreign enterprises have remarkable advantages in earnings, and there is a great income gap between different regions, sectors, and within the sectors. To summarize, the market and state play a dual role in determining income in transitional urban China.
Highlights
China’s Communist Revolution was founded upon the idea of equality of wealth
In order to estimate the relationships between the logged annual income and several predictors including gender, work experience, education, foreign language skill, party membership, type of “Hukou”, geographical location, and workplace, my analyses rely on Ordinary Least Squares (OLS) regression to predict total individual income in urban China
The Chinese Communist Party tends to recruit educated youths and professional, which indicates that the role of educational credentials has become more and more important
Summary
China’s Communist Revolution was founded upon the idea of equality of wealth. In pre-reform China, the society was relatively equal in income distribution and resource allocation. Since 1978, China has been carrying out a transformation from a socialist planned economy to market economy, along with a great social change from relative social egalitarianism to a new era of individualism and competition under the market mechanism. In terms of China, the government has started a policy to allow and encourage some people to get rich first and some regions to develop quickly, and coastal and urban areas obtained the priority to develop first and faster. The income gap between the rich and poor, between urban and rural areas, and between different regions has become larger
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
