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An Investment Model of Social Capital with Empirical Application to Women`s Labour Market Outcomes in Urban China


  • Linda Y. Yueh


The move to a more market-oriented economy is associated with evidence of increased inequality in the incomes earned by men and women. The context of our study of this question is the recent large-scale reform of the inefficient state sector, which has caused layoffs of urban workers that dramatically changed the state of employment in urban China. One factor in determining success in an imperfect labour market could be related to guanxi, the Chinese variant of social capital. We develop a model of social capital in which the decision to invest in guanxi is a function of time and resources expended, which may reflect and cause gender differences. Our original measures of social capital are created with a data set administered in urban China in early 2000. We find that there are gender differences in the stock of social capital and returns within the labour market. Women have less social capital than men and also lower economic returns in terms of earned income.

Suggested Citation

  • Linda Y. Yueh, 2001. "An Investment Model of Social Capital with Empirical Application to Women`s Labour Market Outcomes in Urban China," Economics Series Working Papers 83, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:83

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    References listed on IDEAS

    1. Knight, John & Song, Lina, 1999. "The Rural-Urban Divide: Economic Disparities and Interactions in China," OUP Catalogue, Oxford University Press, number 9780198293309.
    2. Yao, Yang, 1999. "Rural industry and labor market integration in eastern China," Journal of Development Economics, Elsevier, vol. 59(2), pages 463-496, August.
    3. Linda Yueh, 2006. "Parental investment in children's human capital in urban China," Applied Economics, Taylor & Francis Journals, vol. 38(18), pages 2089-2111.
    4. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2000. "The Economic Approach to Social Capital," NBER Working Papers 7728, National Bureau of Economic Research, Inc.
    5. Heckman, James J, 1993. "What Has Been Learned about Labor Supply in the Past Twenty Years?," American Economic Review, American Economic Association, vol. 83(2), pages 116-121, May.
    6. Björn Gustafsson & Shi Li, 2000. "Economic transformation and the gender earnings gap in urban China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(2), pages 305-329.
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    Cited by:

    1. Sandra Viviana Polanía Reyes, 2005. "Capital Social E Ingreso De Los Hogares Del Sector Urbano En Colombia," DOCUMENTOS CEDE 002099, UNIVERSIDAD DE LOS ANDES-CEDE.

    More about this item


    general microeconomics; gender; discrimination; social capital; China;

    JEL classification:

    • D0 - Microeconomics - - General
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East


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