Marketization and Income Distribution in Urban China, 1988 and 1995

    Abstract: Marketization is both a central and a controversial term in the ongoing debate about the socioeconomic consequences of market reforms in China and elsewhere. We present a view that China's course of marketization has been an interactive process of market growth and state transformation. We quantitatively measure intercity variation in labor and capital marketization and examine income returns to positional power and human capital with national survey data from the 1988 and 1995 Chinese Household Income Projects. Our analyses show that over the seven-year period: (1) income differential increases between workers in the monopoly and open sectors; (2) income returns to such positional power as Communist party membership and cadre status increases; (3) income returns to human capital as measured by education and professional competence increase; and (4) 1995 income returns to measures of positional power and human capital are significantly higher in cities where labor and capital markets are more developed.
    
     
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    ( in Research in Social Stratification and Mobility,Volume 19, 2002, Pages 377–415 )