The Increasing Role of Human Capital and the Decline of Institutional Factors in Shaping Occupation and Income Patterns in Market Reform: A Case Study of Five Factories in Dongguan, China

This article examines social inequality among factory employees in different household registration (hukou) categories in a rapidly growing labor market, based on concepts drawn from both migration and market transition studies. The researcher uses survey data from five factories in Dongguan, a city on the southeast coast of China, to examine the determinants of factory employees’ occupation and income. By distinguishing administrative staff and skilled workers from unskilled workers, an examination shows that rural households and individuals without political connections (but who are more educated) are increasingly competitive with urban households in the manufacturing sector. The results suggest the importance of individuals’ manner and level of involvement in the labor market, in which the low entry requirement in the manufacturing sector reduces the influence of the hukou system and Communist Party membership on job recruitment.