Labour market outcomes and migration: evidence from China

ABSTRACT

Migrants enter the labour market as self-employed with employees (as employers), self-employment without employees (as own-account workers), and paid-employment (as salaried employees). This study examines whether self-employment has higher earnings than the paid-employment for China’s migrants. Analysing a data set from the 2016 China Migrants Dynamic Survey, our results suggest that employers have the highest earnings potential on average, followed by own-account workers, and paid-employment. Moreover, marginal returns increase for an employer in higher-income quantiles. Thus, this study concludes that the rich are self-employed with higher returns, while the poor view it as a substitute for unemployment.

KEYWORDS:

• Self-employment
• migrants
• income gap
• propensity score matching

JEL CLASSIFICATION:

• J23
• J31
• J21

Acknowledgments

We present many thanks for the comments from two anonymous reviewers.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ The Hukou system is a household registration system since 1958. Chinese people are categorised into agricultural hukou and nonagricultural hukou. Switching from agricultural hukou to nonagricultural hukou was nearly impossible before the mid-1980s.

² State-owned enterprises, private businesses, and the government sector.

Additional information

Funding

This work was supported by National Social Science Funding of China [grant number 14CJL012].