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The role of social capital in the labour market in China

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  • John Knight
  • Linda Yueh

Abstract

Social capital is considered to play an economic role in labour markets. It may be particularly pertinent in one that is in transition from an administered to a market-oriented system. One factor that may determine success in the underdeveloped Chinese labour market is thus "guanxi", the Chinese variant of social capital. With individual-level measures of social capital, we test for the role of "guanxi" using a dataset designed for this purpose, covering 7,500 urban workers and conducted in early 2000. The evidence is consistent with the basic hypothesis. Both measures of social capital - size of social network and Communist Party membership - have significant and substantial coefficients in the income functions. Social capital can have influence either in an administered system or in one subject to market forces. It appears to do so in both parts of the labour market. Copyright (c) 2008 The Authors. Journal compilation (c) 2008 The European Bank for Reconstruction and Development.

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Bibliographic Info

Article provided by The European Bank for Reconstruction and Development in its journal Economics of Transition.

Volume (Year): 16 (2008)
Issue (Month): 3 (07)
Pages: 389-414

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Handle: RePEc:bla:etrans:v:16:y:2008:i:3:p:389-414

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Cited by:
  1. Ming Lu & Jianzhi Zhao, 2009. "The Contribution of Social Networks to Income Inequality in Rural China: A Regression-Based Decomposition and Cross-Regional Comparison," Global COE Hi-Stat Discussion Paper Series gd08-019, Institute of Economic Research, Hitotsubashi University.
  2. Long, Wenjin & Appleton, Simon & Song, Lina, 2013. "Job Contact Networks and Wages of Rural-Urban Migrants in China," IZA Discussion Papers 7577, Institute for the Study of Labor (IZA).
  3. Knight, John, 2013. "The economic causes and consequences of social instability in China," China Economic Review, Elsevier, vol. 25(C), pages 17-26.
  4. Chen, Yuanyuan & Feng, Shuaizhang, 2009. "Parental Education and Wages: Evidence from China," IZA Discussion Papers 4218, Institute for the Study of Labor (IZA).
  5. Wang, Xiaobing, 2007. "Labor market behavior of Chinese rural households during transition," Studies on the Agricultural and Food Sector in Central and Eastern Europe, Leib­niz Institute of Agricultural Development in Central and Eastern Europe (IAMO), volume 42, number 92321.
  6. Yongqin Wang & Ming Li, 2009. "Costs and Benefits of Relational Contracting in China’s Transition," Transition Studies Review, Springer, vol. 16(3), pages 693-709, October.
  7. Yuanyuan Chen & Shuaizhang Feng, 2011. "Parental education and wages: Evidence from China," Frontiers of Economics in China, Springer, vol. 6(4), pages 568-591, December.
  8. Glauben, Thomas & Herzfeld, Thomas & Wang, Xiaobing, 2005. "Labor Market Participation of Chinese Agricultural Households," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24516, European Association of Agricultural Economists.
  9. Jorg Scheibe, 2003. "The Chinese Output Gap During the Reform Period 1978-2002," Economics Series Working Papers 179, University of Oxford, Department of Economics.
  10. Shiqing Jiang & Ming Lu & Hiroshi Sato, 2010. "Identity, Inequality, and Happiness: Evidence from Urban China," Global COE Hi-Stat Discussion Paper Series gd09-131, Institute of Economic Research, Hitotsubashi University.
  11. Glauben, Thomas & Herzfeld, Thomas & Wang, Xiaobing, 2008. "Labor market participation of Chinese agricultural households: Empirical evidence from Zhejiang province," Food Policy, Elsevier, vol. 33(4), pages 329-340, August.
  12. Wang, Xiaobing & Herzfeld, Thomas & Glauben, Thomas, 2007. "Labor allocation in transition: Evidence from Chinese rural households," China Economic Review, Elsevier, vol. 18(3), pages 287-308.
  13. Glauben, Thomas & Herzfeld, Thomas & Rozelle, Scott & Wang, Xiaobing, 2012. "Persistent Poverty in Rural China: Where, Why, and How to Escape?," World Development, Elsevier, vol. 40(4), pages 784-795.
  14. Yueh, Linda, 2009. "China's Entrepreneurs," World Development, Elsevier, vol. 37(4), pages 778-786, April.
  15. Shuang LI & Ming LU & Hiroshi Sato, 2008. "The Value of Power in China: How Do Party Membership and Social Networks Affect Pay in Different Ownership Sectors?," Global COE Hi-Stat Discussion Paper Series gd08-011, Institute of Economic Research, Hitotsubashi University.

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