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The role of social capital in the labour market in China1

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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.

Suggested Citation

  • John Knight & Linda Yueh, 2008. "The role of social capital in the labour market in China1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(3), pages 389-414, July.
  • Handle: RePEc:bla:etrans:v:16:y:2008:i:3:p:389-414
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    File URL: https://doi.org/10.1111/j.1468-0351.2008.00329.x
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    References listed on IDEAS

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    1. Knight, John & Song, Lina, 1999. "The Rural-Urban Divide: Economic Disparities and Interactions in China," OUP Catalogue, Oxford University Press, number 9780198293309.
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    Cited by:

    1. Quheng Deng & Björn Gustafsson & Shi Li, 2013. "Intergenerational Income Persistence in Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(3), pages 416-436, September.
    2. Aghajanian, Alia Jane, 2016. "Social capital and conflict: impact and implications," Economics PhD Theses 0116, Department of Economics, University of Sussex Business School.
    3. repec:taf:applec:v:49:y:2017:i:43:p:4363-4377 is not listed on IDEAS
    4. Yuanyuan Chen & Shuaizhang Feng, 2011. "Parental Education and Wages: Evidence from China," Frontiers of Economics in China, Higher Education Press, vol. 6(4), pages 568-591, December.
    5. Chi Huu Nguyen & Christophe J. Nordman, 2018. "Household Entrepreneurship and Social Networks: Panel Data Evidence from Vietnam," Journal of Development Studies, Taylor & Francis Journals, vol. 54(4), pages 594-618, April.
    6. Yueh, Linda, 2009. "China's Entrepreneurs," World Development, Elsevier, vol. 37(4), pages 778-786, April.
    7. repec:bla:asiaec:v:31:y:2017:i:3:p:239-252 is not listed on IDEAS
    8. repec:dau:papers:123456789/14463 is not listed on IDEAS
    9. repec:eee:regeco:v:67:y:2017:i:c:p:108-118 is not listed on IDEAS
    10. Glauben, Thomas & Herzfeld, Thomas & Rozelle, Scott & Wang, Xiaobing, 2012. "Persistent Poverty in Rural China: Where, Why, and How to Escape?," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 784-795.
    11. repec:eee:jcecon:v:45:y:2017:i:4:p:963-983 is not listed on IDEAS
    12. repec:kap:sbusec:v:52:y:2019:i:3:d:10.1007_s11187-017-9979-y is not listed on IDEAS
    13. repec:eee:chieco:v:47:y:2018:i:c:p:96-115 is not listed on IDEAS
    14. LIU Yang & KAWATA Keisuke, 2015. "Labor Market and the Native-Immigrant Wage Gap: Evidence from urban China," Discussion papers 15142, Research Institute of Economy, Trade and Industry (RIETI).
    15. Long, Wenjin & Appleton, Simon & Song, Lina, 2013. "Job Contact Networks and Wages of Rural-Urban Migrants in China," IZA Discussion Papers 7577, Institute of Labor Economics (IZA).
    16. repec:kap:asiapa:v:36:y:2019:i:2:d:10.1007_s10490-017-9557-5 is not listed on IDEAS
    17. Knight, John, 2013. "The economic causes and consequences of social instability in China," China Economic Review, Elsevier, vol. 25(C), pages 17-26.
    18. Hong, Liu & Tisdell, Clem & Fei, Wang, 2017. "Social Capital, Poverty and its Alleviation in a Chinese Border Region: A Case Study in the Kirghiz Prefecture, Xinjiang," Social Economics, Policy and Development Working Papers 263148, University of Queensland, School of Economics.
    19. Chai, Shijun & Chen, Yang & Huang, Bihong & Ye, Dezhu, 2018. "Social Networks and Informal Financial Inclusion in the People’s Republic of China," ADBI Working Papers 802, Asian Development Bank Institute.

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