Social Networks and Workers\u2019 Earnings in Contemporary China

Qiong Wu,Michael Wallace

doi:10.1007/s12140-020-09347-6

Abstract

Guanxi is the central form of social capital in Chinese society that provides access to resources, assets, and benefits that facilitate social status and social mobility. Substantial empirical research has documented the importance of guanxi networks in accessing resources for getting good jobs, moving up to better jobs, and achieving higher wages. Chinese Lunar New Year is a special occasion of cultural and social significance to cultivate and maintain guanxi networks. We thus conceptualize guanxi networks as the visiting networks during the Chinese New Year celebration. Using the 2008 Chinese General Social Survey, we construct five measures of the Chinese New Year greeting networks and assess their impact on workers’ earnings as well as gender differences in their effects on earnings. We also consider two major structural constraints—the hukou and social class—that affect the extent of one’s social networks and earnings. Our findings not only confirm the overall positive effects of the Chinese New Year greeting networks on earnings but also offer nuances that enhance the understanding of how guanxi networks as a manifestation of social capital embedded in Chinese traditional culture work in the contemporary era and intensify gender gaps.

Highlights

In an uncertain world, a key countervailing resource for improving one’s life chances and elevating one’s social position is social capital [17, 44, 45, 53]
Despite that one’s social connections are likely to be constrained by structural positions and personal attributes, we assume that the Chinese New Year greeting networks still exert some independent effects on earnings controlling for hukou, class, and other covariates
We have asked whether guanxi networks, represented by visiting networks during the Chinese New Year celebration, are relevant for improving the economic standing of workers in contemporary China

Summary

Introduction

A key countervailing resource for improving one’s life chances and elevating one’s social position is social capital [17, 44, 45, 53]. Where the economic decision-marking has been increasingly marketized and rationalized, while studies that based on large-scale surveys tend to reflect nationwide patterns Another reason lies in the various measurements of guanxi networks. Research on the effect of social networks on the gender gap in earnings in China is mixed, with some studies suggesting that networks increase the gender gap [28, 47, 51, 52], and others indicating that networks reduce the gap, at least in some sectors of the labor market [48]. Further research is necessary to determine whether gender differences in social capital mitigate or exacerbate baseline differentials in earnings as China undergoes the transition to a market economy

Background

Results

Discussion and Conclusions