Informal Employment at an Older Age in China: Why Your First Job Matters

Using the data of individuals approaching retirement age from the China Health and Retirement Longitudinal Study (CHARLS), this chapter explores factors associated with informal employment at older age in China. We found that males, individuals with more education, or those with urban residency have a lower chance of being in informal employment at an older age. We further examined career path dependency by investigating the link between a worker’s first job and the status of their employment at a later stage in life. Our findings show that older workers whose first job was in the state sector were the least likely to work informally at an older age. In contrast, individuals who were self-employed in their first job had 22.69% higher chance ending their working life with informal employment at older age than those who started in state sector. Results indicate that employment opportunities among older workers are segmented by, and depend on, institutional arrangements. The difficulties in breaking up the structural barriers in employment suggest that disadvantages at an early stage of life are likely to be exacerbated at an older age, which further enlarges the inequalities among older people. This raises serious challenges for policy makers as how to ensure those who have been in precarious employment have access to basic social security after they retire.