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.
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.