The Role of Social Capital in the Labour Market in China
AbstractSocial capital is thought to play an economic role in the labour market. 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 data set designed for this purpose, covering 7,500 urban workers and conducted in early 2000. The basic hypothesis is supported. Both measures of social capital - size of social network and Communist Party membership - have significant and substantial effects in the income functions. Indeed, social capital may be just as important as human capital: remarkably, one additional reported contact contributes more than one additional year of education. Social capital can have influence either in an administered system or in one subject to market forces. We find that it does so in both parts of the labour market, but some of the evidence suggests that it is more important in the latter.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 121.
Date of creation: 01 Oct 2002
Date of revision:
labour markets; wages; social capital; social networks; China;
Other versions of this item:
- John Knight & Linda Yueh, 2008. "The role of social capital in the labour market in China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(3), pages 389-414, 07.
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rebick, Marcus E, 2000.
"The Importance of Networks in the Market for University Graduates in Japan: A Longitudinal Analysis of Hiring Patterns,"
Oxford Economic Papers,
Oxford University Press, vol. 52(3), pages 471-96, July.
- Rebick, Marcus E, 1998. "The Importance of Networks in the Market for University Graduates in Japan: A Longitudinal Analysis of Hiring Patterns," CEPR Discussion Papers 1816, C.E.P.R. Discussion Papers.
- Knight, John & Song, Lina, 1999. "The Rural-Urban Divide: Economic Disparities and Interactions in China," OUP Catalogue, Oxford University Press, number 9780198293309.
- Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
- Steven N. Durlauf, 1991.
"Nonergodic Economic Growth,"
NBER Working Papers
3719, National Bureau of Economic Research, Inc.
- Mortensen, D. T. & Vishwanath, T., 1995.
"Personal contacts and earnings: It is who you know!,"
Elsevier, vol. 2(1), pages 103-104, March.
- Mortensen, Dale T. & Vishwanath, Tara, 1994. "Personal contacts and earnings : It is who you know!," Labour Economics, Elsevier, vol. 1(2), pages 187-201, March.
- Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
- Narayan, Deepa & Pritchett, Lant, 1999.
"Cents and Sociability: Household Income and Social Capital in Rural Tanzania,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 47(4), pages 871-97, July.
- Narayan, Deepa & Pritchett, Lant, 1997. "Cents and sociability : household income and social capital in rural Tanzania," Policy Research Working Paper Series 1796, The World Bank.
- Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
- Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-18, December.
- Katharine G. Abraham & James L. Medoff, 1983. "Length of Service and the Operation of Internal Labor Markets," NBER Working Papers 1085, National Bureau of Economic Research, Inc.
- Knight, J. & Lina, S., 1990.
"The Determinants Of Urban Income Inequality In China,"
Economics Series Working Papers
9991, University of Oxford, Department of Economics.
- Knight, John B & Song, Lina, 1991. "The Determinants of Urban Income Inequality in China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(2), pages 123-54, May.
- Bartlett, Robin L & Miller, Timothy I, 1985. "Executive Compensation: Female Executives and Networking," American Economic Review, American Economic Association, vol. 75(2), pages 266-70, May.
- 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.
- 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.
- 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.
- 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.
- Jiang, Shiqing & Lu, Ming & Sato, Hiroshi, 2012. "Identity, Inequality, and Happiness: Evidence from Urban China," World Development, Elsevier, vol. 40(6), pages 1190-1200.
- Jorg Scheibe, 2003. "The Chinese Output Gap During the Reform Period 1978-2002," Economics Series Working Papers 179, University of Oxford, Department of Economics.
- Chen, Yuanyuan & Feng, Shuaizhang, 2009. "Parental Education and Wages: Evidence from China," IZA Discussion Papers 4218, Institute for the Study of Labor (IZA).
- 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.
- Knight, John, 2013.
"The economic causes and consequences of social instability in China,"
China Economic Review,
Elsevier, vol. 25(C), pages 17-26.
- John Knight, 2012. "The Economic Causes and Consequences of Social Instability in China," Economics Series Working Papers 619, University of Oxford, Department of Economics.
- 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.
- 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.
- 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.
- 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.
- Yueh, Linda, 2009. "China's Entrepreneurs," World Development, Elsevier, vol. 37(4), pages 778-786, April.
- 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.
- 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).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Caroline Wise).
If references are entirely missing, you can add them using this form.