Market Transition and Income Inequality in Urban China： Evidence from Shapley Value Decomposition

China＇s market-oriented reform is expected to strengthen the role of the market in allocating resources, which raises concerns over the impact of market transformation on income distribution and earnings inequality in the past decades. This paper decomposes the sources of inequality based on the newly developed Shapley value approach and examines the contributions of the market, along with other nonmarket factors, to total inequality. Using the China Health and Nutrition Survey data over the period 1989-2009, we find that the income gap between laborers with a higher level of education and those with a lower level has widened since the transformational reforms of the economy. Our results suggest that the largest contribution of changes in income inequality can be attributed to the increase in returns to education, while the relative contributions of the household registration （hukou） system, type of sector ownership, geographic location, and gender to inequality experienced a downward trend between 1989 and 2009. The authors argue that rising income inequality is the consequence of efficiency improvements and an imperfect economic system, and that the market is a decisive force in economic development as it releases competitive signals and creates incentive mechanisms for innovation. Creating a more efficient labor market and increasing investment in human capital, particularly equalizing educational opportunities and improving the quality of education in lagging rural and inland regions to disadvantaged groups, are significant for an equitable distribution of income and sustainable development in the long run.

Employment marketization,social security inclusion and rights equalization of rural migrants

Against the backdrop of stagnation in hukou reform,a new theme in research on internal migration in China has emerged.Are reforms aimed at equalizing citizens’rights effective in promoting the rights and position of rural migrants?This paper proposes that a dual transition is taking place in China,one that is affecting the market and another in the area of social policy.The paper examines two lines of reform measures intended to equalize rights:the marketization of employment and the development of inclusive social policy.This investigation on the reforms shows that rural migrants to cities have attained citizenship-based rights to employment and job-related social insurance.This paper also discusses the issue of local citizenship as a by-product of China’s reform and development.The paper’s findings imply that rural migrants are beneficiaries of China’s dual-transition.

Returns to education in rural China

Based on one of the most widely used datasets by foreign-based sociologists,this paper examines the rate of returns to education in rural China.Compared with the previous studies that showed rather low rates in rural areas throughout the 1980s,this study finds a considerably higher rate in 1996.A chief contributor is the rapid non-agricultural development,which creates enormous upward mobility opportunities,particularly for the more educated.Due to the uneven economic development nationwide,the rate of returns to education varies widely across regions.In areas with less developed non-agricultural sectors,it remains low.In contrast,where off-farm employment is widespread,it is much higher.In addition,the labor market is functioning to allocate the more educated to better-paid jobs,but has yet to produce higher returns to education in non-agricultural sectors than in the agricultural sector.However,changes may be occurring in coastal regions.

The Growth Paths and Mechanisms of Chinese Private Enterprise

During the past forty years of reform and opening up,China’s private economy has made remarkable strides.This paper introduces start-up organizational processes into the study of elite mobility in emerging markets,exploring the relationship between the social origins of entrepreneurs and their entrepreneurial outcomes.Our research finds that the initial scale,growth rate and current size of enterprises established by elite entrepreneurs are larger than those of grassroots entrepreneurs.With the deepening of economic reform and the growth of the private economy,the social origins of large business owners generally tend to be elitist and the scale advantage of the enterprises set up by elite entrepreneurs,especially endogenous or inside-track entrepreneurs,is ever more striking.The expansion of such enterprises’superior position is mainly due to their initial advantages of scale;after the start-up period,the advantage conferred by their pace of growth does not increase synchronously.In order to promote the further development of the private economy and release its innovative potential,it is necessary to give full play to the government’s function of regulating market operations and correcting market failure,and thus actively creating a good business environment.