Investigating the role of multilevel social capital in ethnic income inequality in the Chinese labour market

Abstract

This study examines to what extent individual- and county-level social capital respectively and jointly explain the Chinese ethnic income inequality. Using two waves of the Chinese General Social Survey data, social capital is operationalised into extensivity, upper reachability, mean prestige, and range via the position generator. Results show that social capital is unevenly distributed along the ethnic line in China, minorities are in disadvantaged position in accessing social capital, especially the number of occupation accessed and mean occupational prestige, compared with Han. When cross-level interactions are taken into account, with the increase of county-level social capital, its positive effect on minorities’ income attenuates while it become stronger for Han’s income. The differential returns of social capital on income between minorities and Han may be attributable to the mean prestige of their accessed position networks. Finally, the Blinder-Oaxaca decomposition analysis uncovers that when all variables are controlled for, there is still approximately 24 % of the income gap between minorities and Han remained unexplained, indicating the severe ethnic wage penalty minorities are facing in the Chinese labour market.