Who gets what jobs in China's countryside? A multinomial logit analysis

Abstract

Asset‐poor rural households increase their incomes primarily through the transfer of labour into activities which yield higher returns. This paper examines the determinants of job status among members of rural households in China's transitional economy. The objective is to gain a better understanding of who gains access to higher paying employment, thereby increasing their incomes, and the constraints which prevent other individuals or households from improving their economic position. Two hypotheses are investigated: first, that household demographic composition affects individual employment decisions, with farm households pursuing a strategy to allocate labour among different types of employment; and second, that non‐market mechanisms such as political connections play a role in determining employment outcomes. The results demonstrate the importance of individual characteristics, particularly age and gender, as well as a continuing role for non‐market mechanisms in the transfer of labour into more remunerative activities.