the elite, the natves, and the outsiders - migration and labor market segmentation in urban china

8/13/2019 The Elite, The Natves, And the Outsiders - Migration and Labor Market Segmentation in Urban China

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The Elite, the Natives, and the Outsiders: Migration and Labor Market Segmentation in UrbanChinaAuthor(s): C. Cindy FanSource: Annals of the Association of American Geographers, Vol. 92, No. 1 (Mar., 2002), pp.103-124Published by: Taylor & Francis, Ltd. on behalf of the Association of American GeographersStable URL: http://www.jstor.org/stable/1515270

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The Elite, the Natives, and the Outsiders:

Migration and Labor Market Segmentationin Urban China

C. Cindy FanDepartment of Geography, University of California, Los Angeles

Established migration theories are mostly based on capitalist market economies and downplay the role of institu?tions in internal migration and labor market processes. In socialist and transitional economies such as those in Russiaand China, however, investigations of migration and the labor market must begin by examining the nature and con?sequences of state institutions. In this article, I argue that the migration and labor market processes in Chinese citiesare deeply influenced by an institution-based opportunity structure. The household registration (hukou) system, inparticular, is interwoven with distribution of services and job opportunities. Most peasants who enter cities in re?sponse to increased demands for cheap labor are not granted urban citizenship and are treated as outsiders to theurban society. The experiences of these temporary migrants contrast with those of permanent migrants who arestate-sponsored or have access to institutional resources. Using qualitative accounts from a 1995 village-level surveyin Sichuan and Anhui and quantitative data from a survey I conducted in Guangzhou in 1998, this article examinesthe most salient differences among the three subpopulations with different resident statuses: nonmigrant urban na?tives, permanent migrants, and temporary migrants. I show that resident status is central to explaining migrationprocesses and labor market segmentation in the Chinese city. The findings indicate that in terms of human capitalattributes, mobility resources, and labor market entry and shifts, permanent migrants are the most privileged andsuccessful elite, followed by nonmigrant natives, and finally by temporary migrants at the bottom of the hierarchy.These results hint at a new social order of stratification in Chinese cities, underscore the compelling relations be?tween internal migration and labor market development in transitional economies, and suggest that in these econ?omies the state deepens the bifurcation effects about which labor market segmentation theory is concerned. KeyWords: China, institutions, labor market, migration, transition.

Theoreticalapproaches that address the relationsbetween internal migration and the labor market

are primarily based on capitalist market economies.Neoclassical, behavioral, and labor market segmentationtheories can partially explain changes in transitionaleconomies, as they fall increasingly under the forces ofglobalization, urbanization, and rural-urban migration.However, these theories do not emphasize state institu?tions, which happen to be central to spatial and socialprocesses in socialist and transitional economies. Whenresearchers write about institutions, they are primarilyconcerned with international migration, immigration, orless tangible institutional factors related to ethnicity andoccupation-wide internal labor markets. Few empiricaland theoretical studies examine policies enforced by thestate, such as the registration systems in Russia andChina, and their effects on intranational migration.China's socialist market economy is marked by anuneasy blend of plan and market. On the one hand,hallmark institutions of the command economy con?tinue to control urban permanent residence and entitle-

ments; on the other hand, market forces are exertingstrong pull for peasants to migrate to cities and to ac-celerate the development of an urban labor market (Cao1995; Knight and Song 1995; Yang and Guo 1996; Cookand Maurer-Fazio 1999). By the 1990s, estimates ofthe

floating population ?rural people leaving the country-side in search of work elsewhere?were in the range of100 million (Solinger 1999a, 18). The vastly differingfates among migrants and between peasant migrants andurbanites epitomize the awkwardness of this transitionalsystem. Permanent migrants are sponsored by the stateand are selective and privileged; compared with them,

temporary migrants are outside of state plan, on theirown, and inferior. Migrants' varied opportunities are out?comes of differentials in human capital, but above allthey are products of socialist policies such as the house?hold registration (hukou) system. The young, distorted,and segmented labor market fully reflects the institu?tional barriers blocking peasant migrants from presti-gious jobs, as well as individuals' positions in a rigid insti?tutional hierarchy.

AnnalsftheAssociationfAmericaneographers,2(1), 2002,pp.103-124? 2002byAssociation fAmerican eographersPublishedyBlackwellublishing,50 MainStreet,Malden,MA02148,and108CowleyRoad,Oxford,OX41JF, K.


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104 Fan

This article's premise is that resident status?whetherone has local urban hukou?is at the center of migrationprocesses and labor market segmentation in China. Ishow that a hierarchy of opportunity structure in whichpermanent migrants are at the top, followed by urbannonmigrants and finally temporary migrants at thebottom, characterizes China's urban labor market. Theyform, respectively, the elite, the natives, and the out?siders. I argue that this hierarchy does not resultsolely from differentials in human capital attributessuch as education, but is also clearly an outcome ofthestate's control over resident status and access to insti?tutional resources, which reinforces a new social order ofstratification.

While existing research on China has dealt with therelations between hukou and migration, their interrela-tionships with labor market segmentation are poorly un?derstood. Furthermore, most studies employ only mac-rolevel data that are limited for understanding processessuch as migration decision-making, job search, and jobchange. This article uses a combination of qualitativeinformation from a published study of village householdsin Sichuan and Anhui provinces in 1995 and quantita?tive data from a survey I conducted in the city of Guang-zhou in 1998. My analysis aims to examine the experi-ences of peasant migrants and the salient differencesamong nonmigrants, permanent migrants, and tempo?rary migrants in the Chinese city. The next section re?views migration and labor market theories and how theydeal with institutions. I then describe the institutionalbases for understanding internal migration and the ur?ban labor market in China and discuss the inadequaciesof existing theories for understanding the Chinese case.The articles empirical analysis begins with interpreta?tions of selected accounts from the Sichuan and Anhuisurvey, followed by descriptive and statistical analyses ofthe Guangzhou survey.

Migration, Labor Market, and InstitutionsThe intersection between migration and labor market

has been one of the most fruitful areas of social scienceresearch. The most popular theoretical approaches thatdeal with migration, labor market, and/or the interactionbetween the two emphasize one or more of the neoclassi-cal, behavioral, and structural perspectives. In the neo-classical view, migration is an outcome of the geographi?cal differences in the supply and demand of labor, and atthe individual level is an investment in human capitaland a result of rational calculations of costs and returns(e.g., Schultz 1961; Sjaastad 1962; Todaro 1969). Ac-

cordingly, migration is selective of those whose labor isdemanded by the host areas. Later extensions of neoclas-sical migration theory to including expected and long-term returns (e.g., Todaro 1976) also seek to explain whyrural-urban migration flows in developing countries con?tinue despite urban unemployment.

Whereas the neoclassical perspective emphasizes in?dividual human capital characteristics, the behavioralapproach focuses on contextual or psychological factorsmodifying or constraining rational decision-making(Wolpert 1965). The latter s advantage over the neoclas?sical perspective lies in the recognition that individualsdo not behave exactly the same way and that humancapital and rational economic calculations only partiallyexplain individuals' decision-making. More recent workson job search (e.g., Granovetter 1974,1981; Hanson andPratt 1991; De Haan 1995) extend this argument byhighlighting the roles of informal personal communica?tion and nonwage job attributes in the ways in whichpeople go about finding jobs. Focusing on gender, Han?son and Pratt (1991) argue that employees are fully em?bedded in social relations that drive men and womeninto different labor market segments. Like the neoclassi?cal approach, however, the behavioral perspective payslittle attention to institutions.

Both neoclassical and behavioral approaches examinesupply-side factors and the migrants' and workers' per?spectives. The structural approach, which highlightswider institutional and market processes, stresses demand-side factors. The bulk of recent research that articulatesthe structural perspective focuses on how the labor mar?ket is segmented into two sectors: the formal and infor?mal sectors, or the primary and secondary sectors (e.g.,Piore 1979). To put it simply, labor market segmentationexists when people of similar backgrounds are clusteredin specific occupations or jobs (De Haan 1995). Explana-tions range from market imperfections (Amsden 1980)to Marxian notions of dualism and polarization (Reich etal. 1973). Research on third world cities has focused onrural migrants who are unable to find work in the formalurban capitalist sector and spill over to the informal sec?tor, one that is marked by labor-intensive production,unskilled labor, low productivity and income, and poorjob security and protection (Harris and Todaro 1970;McGee 1982; Gupta 1993). At the same time, researchon capitalist industrial economies has identified a pri?mary sector, wherein employment is organized in an in?ternal labor market with nonprice mechanisms and well-defined career ladders (Kerr 1954; Sakamoto and Chen1991; Gordon 1995). In the secondary sector, jobs areless stable and employers tend to minimize their commit?ments and responsibilities toward labor. The indicators


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The Elite, the Natives, and the Outsiders 1Q5

for the primary-secondary dichotomy vary greatly, butcommon among them are occupation, industrial sector,firm size, and union/nonunion divide (Sakamoto andChen 1991). Gordon (1995) shows that primary sectorjobs are associated with contracted migration?migrationsecured with employment?and secondary sector jobswith speculative moves where job search follows migra?tion. Despite the variety of settings in which researchutilizing the labor market segmentation theory is con-ducted, a common thread running through it is the iden-tification of two distinct types of labor market experi-ences. In this light, the formal-informal dichotomy canbe subsumed under the rubric of the primary-secondarydichotomy. Employees in the primary sector have betterskills, more bargaining power, and more desirable in?come, benefits, job security, and career development op?portunities than those in the secondary sector.

Applications of the labor market segmentation theoryhave highlighted two ways in which institutions are im?portant. The first deals with organization of internallabor markets at the firm or occupation level that is usu?ally associated with large firms and unionization (Saka?moto and Chen 1991). Empirical studies have found thatthis institutional factor works to the disadvantage ofwomen and ethnic minorities, who are more likely to becrowded into the secondary sector (Gordon 1995). Sec?ond, studies on international migration emphasize thelaws and regulations of immigration and refugee migra?tion (e.g., Farer 1995), foreign worker programs (e.g.,Calavita 1992; Solinger 1999b), the incorporation of im?migrants into the labor market (e.g., Waldinger 1992),and the less tangible forms of segmentation categories,such as ethnicity and nativity (Wright and Ellis 1997,2000). In both cases, it is the migrants and the marginal?ized subpopulations in society that are subject to institu?tional constraints?firm- and occupation-wide internallabor markets, immigration restrictions, and discrimina?tion?so that they are more likely to enter the secondarysector. These constraints further illustrate the inade-quacy of investigations that rely solely on neoclassicaland human capital explanations, and suggest that an in?stitutional perspective is necessary for understanding theinteraction between migration and the labor market.

Despite the many recent studies that examine labormarket segmentation and its institutional bases, fewhave investigated settings other than capitalist marketeconomies. We know little about the interaction amongmigration, labor markets, and institutions in socialist andtransitional economies (Mitchneck 1991). Yet it is inthese societies that institutions, especially state institu?tions, play most powerful roles in shaping migration andlabor market processes. In the former Soviet Union, col-

lectivization campaigns, industrialization drives, andorganized recruitment promoted rural-urban migrationduring the late 1920s and 1930s (Hoffmann 1991). Facedwith rapid urban in-migration and overcrowding in cit?ies, the Soviet state established an internal passport sys?tem in 1932, requiring individuals aged sixteen or aboveto obtain a residence permit (propiska) (Buckley 1995).Accordingly, migration was subject to official approvaland became another area of the society to be organizedand planned?just like the effect of five-year plans on in?dustrial production. Most importantly, residence regis-tration was interwoven with government guarantees anddistribution of social services, such as state-subsidizedhousing, education, and health care (Mitchneck andPlane 1995a). Though the registration system was notsuccessful in controlling rural-urban migration, it servedan important function in controlling access to socialbenefits and programs (Buckley 1995).Since the breakup of the former Soviet Union, mostresearchers' attention has shifted to the massive migra?tion of Russians and Russian-speakers from newly inde?pendent states such as the Ukraine, Kazakhstan, andUzbekistan to Russia (e.g., Pilkington 1998). Neverthe-less, the legacy of Soviet-period institutions continues tobe powerful. Buckley s (1995, 915) remark summarizesmost effectively the stickiness of socialist institutions:

In any large scale sociopolitical transition, the institu?tions of the previous regime are not always compatiblewith the process of change and reform. Despite transi?tion, residence permits are still in use in Russia, symbol-izing the state's guarantee of access to official systems ofdistribution. The notion of a social contract between thestate and individuals continues to affect migrants' calcu?lus, so that individuals' decisions and migration processesare influenced not only by human capital and economicconsiderations but also by access to services and re?sources tied to the registration system (Mitchneck andPlane 1995a, 1995b).

The case of the former Soviet Union and post-SovietRussia illustrates two distinct features of institutionscommonly found in socialist and transitional economies.First, state institutions are tangible entities, and the en-forcement of regulations means that internal migration issubject to official approval. Undocumented migrantsbear the consequences of fines and refusal of social ser?vices. In capitalist societies, these institutional effectsexist, but usually for undocumented immigrants and sel-dom for internal migrants. Second, state and nonstateinstitutions are interwoven with one another, making itextremely difficult for the effects of a particular institu-tion to change until the entire array of related institutionsalso changes. In large Russian cities, the registration sys-


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106 Fan

tem is steadfast because the housing market is still re?stricted and because the distribution of benefits is admin-istered through registration (Buckley 1995). This featureat least partially explains the lasting legacies of socialistpolicies. By contrast, in capitalist societies the provisionof and access to services are largely independent of inter?nal migration. These differences suggest that an institu?tional perspective focusing on state institutions must becentral to the investigations of migration and labor mar?ket segmentation in socialist and transitional economies.While the neoclassical, behavioral, and structural per?spectives are all useful, research on socialist and transi?tional economies must begin by examining pertinentstate institutions and policies. An institutional perspec?tive complicates analyses that assume capitalist marketcontexts. In the next section, I elaborate on the institu?tional bases of migration and urban labor markets intransitional China, where the states role deepens thesegmentation effects about which the structural approachis concerned.

Institutional Bases of Migration andUrban Labor Markets in China

Migration and the development of a labor market arethe two most compelling and intricately related forcesthat have transformed urban China in the post-Mao pe?riod. Yet both continue to be constrained and monitoredby the state.

In pre-reform China, labor allocation was highly cen-tralized and tightly controlled by the state. The system of

unified state assignment (tongyi fenpei) assigned schoolgraduates to specific sectors, occupations, and regions ac?cording to the state's development blueprints. Likewise,workers were transferred to new jobs according to thestate's plan of labor allocation. As a result, job mobilitywas low, labor market media were not necessary, and un-employment was rare. With an iron rice bowl, workerslacked incentives for improving productivity. Thoughurban efficiency was low, it was absorbed by the state'ssubsidies to cities. The state sector dominated the urbaneconomy, while the nonstate sector was small and weak.In addition, the urban economy was relatively homoge-neous because heavy industry was designated as the keysector. In fact, pre-reform Chinese cities were regarded as

producing entities where social and residential stratifi-cations were minimized, the tertiary sector was keptsmall, and city size was strictly controlled (Lo, Pannell,and Welch 1977; French and Hamilton 1979; Lo 1994).

The pre-reform model of urban development couldnot have been possible without a powerful government

and its austere policies. A paramount policy that keptthis model operating was the hukou system, which wasimplemented in the late 1950s and has divided Chinesecitizens into two unequal tiers?the privileged urban andthe underprivileged rural (Christiansen 1992; Shenand Tong 1992; Cheng and Selden 1994)- Specifically,hukou is a household record of an individual's (1) regis?tration classification and (2) registration location, andis usually passed from one generation to the next. Regis?tration classification refers to the nonagricultural and

agricultural categories; registration location refers towhere a person s hukou resides, which essentially recordswhere he/she belongs. This article primarily focuses onregistration location in cities?not just having a non?agricultural registration classification but also havingone's hukou residing in a city?which in the past pro?vided access to food and other necessities and even todayguarantees entitlements to subsidized benefits. Prior tothe economic reforms, where a labor market was almostnonexistent, it was next to impossible for peasants whodid not have local hukou to survive in cities.

Not only did the hukou system control rural-urbanmigration, it has in essence reinforced a dualistic systemin China that has fostered a deep divide between the cityand the countryside (Christiansen 1990; Cheng andSelden 1994; Cao 1995; Wong and Huen 1998). The sys?tem reflected the state's bias toward urbanites, to whomit pledged full responsibility in terms of food, housing,work, education, and all sorts of welfare entitlements.The rural Chinese, on the other hand, were expected tobe self-reliant in the countryside and were shut out fromstate support. In this regard, the hukou system is effectivebecause it is coordinated with powerful institutions thatoversee important social functions such as public secu?rity, housing, and welfare (Chan and Zhang 1999). In an?other symptom of urban bias, the state used the unifiedpurchase and marketing (tonggou tongxiao) system thatprevailed until recently to set the prices of agriculturalgoods low and the prices of industrial goods high?theso-called scissors gap?thus extracting value from agri?cultural production in the countryside to accomplish in?dustrialization on the cheap (Tang, Chu, and Fan 1993;Cheng and Selden 1994; Wang 1997; Chan and Zhang1999). At the same time, the hukou system guaranteedthat peasants would be anchored to the countryside andwould contribute to the geographical transfer of value tourban areas.

By the 1980s, however, it was clear that the pre-reform model was incompatible with reform efforts aim-ing at increasing efficiency and productivity. Gradually,therefore, labor market features were introduced intoChina's urban economy (Knight and Song 1995; Maurer-


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The Elite, the Natives, and the Outsiders 1Q7

Fazio 1995). In large cities such as Shanghai the tongyifenpei system remained only in a residual manner by themid-1990s (Davis 1999). School graduates still have ac?cess to state-sponsored channels for employment, butthey now have the option of using market channels suchas advertisements, job fairs, and employment agencies.Enterprise reforms replaced the iron rice bowl withperformance-based hiring, firing, and compensation.State-owned enterprises (SOEs) have begun to use laborcontracts, adopt wage reform, and decentralize labor man?agement. The number of private enterprises, foreign-funded firms, and other non-state-controlled businesseshas significantly increased. At the same time, cities havebegun to evolve from purely productive agents to becom?ing consuming entities characterized by consumerism,burgeoning markets, a division of labor, a thriving ser?vice sector, a growing middle class, and a more interna?tional and Western outlook (Lo, Pannell, and Welch1977; French and Hamilton 1979; Lo 1994; Yang andGuo 1996; Wang 2000). Services such as domestic work,hotels and restaurants, repair shops, and hair salons haveexpanded side by side with factories that produce con-sumer goods for the world market.

Both the transformation of the urban economy andthe infusion of foreign investment put pressure on laborsupply, especially the supply of cheap labor, in urbanareas. Many new jobs created, such as nannies, restaurantservers, and garment factory workers, are at the lowerend of the occupational stratum and are not desired byregular urbanites. At the same time, labor market re?forms and the expansion of the nonstate sector havemade labor allocation more flexible and facilitated thehiring of outside labor (Christiansen 1992). While anew pull for labor is exerted by urban areas, the pushfrom the countryside has always existed, and has beenfurther exacerbated by the increasing magnitude of sur-plus agricultural labor due to improvements in agricul?tural productivity (Shen 1995; Shen and Spence 1995).l

Since the 1980s, in response to the pull and push forlabor, the state has created a variety of additions to thehukou system and new identity statuses that facilitatethe temporary migration of peasants to work in urbanareas (see, e.g., Wang 1997; Wong and Huen 1998; Chanand Zhang 1999). Most notable among them are the

self-supplied food grain hukou (zili kouliang hukou) in1984, the temporary residence permit (zanzhu zheng)in 1985, and the increasing usage ofthe identificationcard {shengfen zheng) since the mid-1980s. In essence,peasants are permitted to migrate to towns and citieswithout obtaining urban hukou, but they will not in thatcase have access to subsidized benefits. The expandinglabor market and the marketization of goods and services

make their survival in the city possible. These changesexemplify the notion that state institutions constantlyreadjust and revise themselves in response to new de?mands and circumstances?an important feature of thetransitional economy (Solinger 1999a). Whereas popu?lation movements prior to the 1980s were mostly urbanto urban or rural to rural (Yang 1994, 120), the abovechanges have given impetus to rural-urban migrationduring the past two decades.

However, the state maintains its gate-keeping roleover urban permanent residence by denying ruralworkers in the city local urban hukou. Their migration isconsidered self-initiated, and they are considered tem-porary migrants. Without a local hukou, they are ex-cluded from the more prestigious and desirable jobs?jobs that are reserved for the urban permanent residents.Instead, rural migrants are considered outsiders to the ur?ban society, and most are relegated to the bottom rungs,picking up dirty, dangerous, and low-paying jobs andfinding a marginalized and underclass existence in thecity (Knight and Song 1995; Yang and Guo 1996). Onthe contrary, state-sponsored and selected migrants tothe city are given urban citizenship and all the advan-tages that accompany it. These include migrants thathave close institutional ties with the state, such as thosewho move to work in jobs assigned by the state and re?turn migrants from previous state-sponsored migrations(Gu 1992), skilled and educated migrants such as profes-sionals, and university students, who are among the mostcompetitive and privileged groups in China. Their mi?gration is accompanied by a local hukou, and they areconsidered permanent migrants. Not only do thesehighly selective migrants (Yang and Guo 1999) have thelegitimacy and right to stay in the city, they also have ac?cess to an array of jobs closed to temporary migrants, in?cluding high-paying positions with full benefits. Theyand the native urbanites are given priorities in the labormarket.

In many ways, the hukou system serves as an internalpassport system in China (Chan, Liu, and Yang 1999;Chan and Zhang 1999), granting urban citizenship tomigrants deemed deserving by the city but not to peasantmigrants brought in because of the cheap labor they pro?vide. Indeed, researchers have compared peasant mi?grants' experiences with undocumented immigrants inthe U.S. and foreign workers in Germany and Japan(Roberts 1997; Solinger 1999b). Though some peasantmigrants have become successful entrepreneurs by tap-ping into family and native-place resources (Ma andXiang 1998), success stories are by far the exceptionrather than the rule.

Despite the relaxation of migration restrictions,


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hukou continues to symbolize one's geographical (ruralversus urban) origin, connotes one's socioeconomic sta?tus, and, above all, defines one's access, opportunities,and constraints (Christiansen 1990; Cheng and Selden1994). In the view of the state, permanent migrants areofficial, orderly, and within state plan, whereas tempo?rary migrants are unofficial, haphazard, and outside ofstate plan. A variety of other terminologies have beenused to describe this dichotomy?hukou versus non-hukou migration, plan versus nonplan (or self-initiated)migration, formal versus informal migration, and de jureversus de facto migration (Gu 1992; Yang 1994; Li 1995;Chan, Liu, and Yang 1999; Fan 1999). However, theterms permanent migrants and temporary migrantsare by far the most descriptive of these two distinct tracksof migration in China, and are the preferred terms in thispaper (e.g., Goldstein and Goldstein 1991; Goldsteinand Guo 1992; Yang 1993, 2000; Yang and Guo 1996).Another addition to the hukou system?the blue stamp(lanyin) hukou ?was formally endorsed in 1992 and hasbecome popular in large cities since the mid- and late1990s. It aimed at attracting the most desirable elementsof the migrant population by providing them with rightof abode and certain welfare provisions in cities (Wang1997; Wong and Huen 1998; Chan and Zhang 1999).The criteria for obtaining a blue stamp hukou include alarge investment or home purchase and age, education,and skills. Most rural migrants are not eligible for andcannot afford this relatively new type of hukou, which inessence creams off the highly educated, skilled, and/ormonied for the benefit of the local government's cofferand the stimulation of local economies. In this regard,the blue stamp hukou does little to mediate the dualisminherited from the decade-old hukou system. Becausethe blue stamp hukou is relatively new and is still of smallmagnitude, it is not included in this article's analysis.

Inadequacies of Noninstitutional Approaches

Most migration and labor market theories developedfor capitalist market economies ignore how state institu?tions shape the opportunity structure in the labor mar?ket. Here, I follow Reskin and Hartmann (1986, 75-80)and define opportunity structure as the nature of employ?ment opportunities that are available, known, and opento people. The neoclassical perspective views migrationand labor market allocation purely as functions of laborsupply and demand, assuming unrestricted labor mobilityand unrestricted access to job information and opportu?nities. In China, peasant migrants do not have unre?stricted labor mobility, and their lack of local hukou lim-

its their access to desirable jobs in the city. The supply ofcheap labor is not only a function of agricultural surpluslabor, but is also?and most importantly?regulated bygate-keeping policies that control who can and cannotbe hired. By making only the low-paying and less desir?able jobs available to peasant migrants, the state has, inessence, deepened the formation ofa secondary sector bymaintaining a continued supply of cheap labor to it. Be?cause temporary migrants lack permanent resident sta?tus, their calculations tend to focus on short-term mone-tary gains rather than long-term investment of humancapital, which deviates from the Todaro-type (1976) as?sumption that migrants respond to expected and long-term returns. In addition, the neoclassical logic treatsmigrants as a homogenous group and does not explainthe bifurcation between elitist permanent migrants anddisadvantaged temporary migrants.

Though the behavioral approach downplays rationaleconomic decision-making, like the neoclassical per?spective it does not emphasize institutional factors. Inthe Chinese context, permanent migrants' institutionalaffiliations with the state translate into greater opportu?nities in the urban labor market; conversely, temporarymigrants' lack of these affiliations renders them margin?alized labor in the city. Individuals' job search process isnot only a function of social network and personal rela?tions; it also reflects the degree of their affiliations withthe state.

The structural approach's focus on wider contextualprocesses and labor market segmentation makes it a moreappealing theoretical alternative for China. In the Chi?nese city, temporary migrants are indeed being chan-neled into jobs similar to those in the secondary sector inother third world cities. However, the labor market seg?mentation theory assumes homogeneity among migrantsin developing countries (Breman 1976) and does not ad?dress their differentiations by their affiliations with thestate. In the Chinese city, temporary migrants are notspillovers from the primary sector; rather, they are blockedby state institutions from entering the primary sector.The incorporation of an institutional perspective, espe?cially one involving state institutions, would complicatelabor market analyses and highlight the role of the statein shaping the opportunity structure and deepening labormarket segmentation.

Another common drawback of noninstitutional ap?proaches is their neglect of the interaction between mi?gration and labor market processes on one hand and theprovision of social services on the other. The cases ofboth Russia and China illustrate that institutions are in?terwoven with one another and that migration and labormarket processes are intricately related to housing, edu-


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The Elite, the Natives, and the Outsiders 109

cation, health care, public security, and other services inthe city. Though this article does not examine in detailthe provision of these services in China, the empiricalanalysis reveals evidence that peasant migrants are out?siders to the city not only in terms of access to jobs butalso in terms of access to other services. In the next sec?tion I discuss qualitative evidence of these experiencesbased on a survey in Sichuan and Anhui.

Experiences of the OutsidersThe opportunities of peasant and temporary migrants

in China are deeply influenced by state institutions.Their migration and labor market experiences reflecttheir outsider status in the city. To illustrate this, I use se?lected information from a 1995 study of 300 householdsin Sichuan and Anhui (NNJYZ 1995),2 two major originprovinces of rural-urban migrants. The study producesfirst-person accounts of migration experiences. This in-valuable and rare source of qualitative data can shedlight on individual-level meanings and experiences in re?lation to large-scale sociopolitical institutions such ashukou. In the following, I select quotes that capture thetypical sentiments expressed by the interviewed migrantsin that survey. This Sichuan man who works as a con?struction worker in Shenzhen, Guangdong stresses theimportance of hukou:

. .. factories and enterprises always recruit workers with lo?cal hukou first. We from the countryside have few options;construction is about the only work available to men fromrural areas. (NNJYZ 1995, 264-67)

He is joined by this Anhui man who works as a handy-man in Nanjing, Jiangsu:

Peasant migrants are all in menial work?work that nobodyelse wants to do. (NNJYZ 1995, 355-57)and by this Sichuan woman who works in an eyeglassfactory in Shenzhen, Guangdong:

We [peasant migrants] are always the frontline productionworkers. Better jobs like office secretaries are reserved forthe locals. (NNJYZ 1995, 59-61)These three cases illustrate that peasant migrants are dis-advantaged in the urban labor market and that they arechanneled into jobs that are considered less desirableand are shunned by local urbanites?in essence, the sec?ondary sector in Chinese cities.

Though SOEs do employ rural migrants, such mi?grants are mostly hired as contract workers and are de?nied the benefits to which permanent workers are en-titled (Maurer-Fazio 1995; Solinger 1999b). For example,

a man working in a state-owned construction enterprisein Hefei, Anhui comments:

Our work is dangerous and difficult. I work at least 12 hoursa day and make only 11 yuan (U.S.$1.30).3 There is practi-cally no compensation for work-related injuries. Our con?tract states that compensation is provided only for work-related deaths and lifetime disabilities. Even in those casesthe compensation is a one-shot deal and is low?maybe10,000 to 20,000 yuan (U.S.$l,200-2,400). But you are com-pletely on our own if only your arms or eyes are injured . . .so we are very careful not to get injured. (NNJYZ 1995,411-13)

The inferior institutional positions of peasants legitimizethe widespread exploitation of their labor (Knight, Song,and Huaibin 1999; Solinger 1999b). The story of thisSichuanese woman is typical among rural-urban migrants:

I work in a toy factory in Dongguan, Guangdong ... I workeight hours everyday, including weekends, and get 1 yuanextra for four hours of overtime. We are not allowed sickleave. Even if I am sick, I must still go to work and wouldnot let my boss know because I am afraid to. We eat andsleep at the factory?12 to a room . . . it's too crowded . . .We are paid by the piece; I don't know how they calculatemy wage?the factory doesn't tell us how our wages are cal?culated ... I make about 200 yuan a month, and I pay 60yuan for my meals in the factory. (NNJYZ 1995, 85-86)The social categorization of peasant migrants as out-

siders results from institutional barriers against them andis especially blatant in the workplace. As outsiders, theymust apply for and carry all kinds of permits. For exam?ple, a worker in a plastics factory in Shenzhen describes:

Before I started working in the factory, I had to obtain anidentity card, a health certificate, and a single (unmar-ried) certificate. At the factory, I obtained a temporary res?idence permit, a factory permit, and another health certifi?cate. The factory deducted the permit fees from my salary.. . If you are caught in the streets without a temporary res?idence permit, the Public Security Bureau can fine you 300to 500 yuan. (NNJYZ 1995, 94-96)

Most factories have gates, which in addition to providingsecurity also symbolize the impermeability between thetemporary migrants and the world outside the factory. Amigrant woman in Dongguan describes:

I seldom leave the dorm; the factory has a security guard;everyone of us has a factory permit?without the permityou cannot get in . . . after work I am usually too tired andgo to bed early. (NNJYZ 1995, 85-86)The notion of outsiders is also rooted in the cultural

practices of membership in the Chinese society. The con?cepts and vocabularies of migration connote one's mem?bership with respect to the host community rather than


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110 Fan

to the act of migration. For example, the literal transla-tions of migrant?qianyi zhe or qianyi di ren?are rarelyused. In their places come terms emphasizing migrants'lack of a permanent home?for example, the floatingpopulation or liudong renkou?and their lack of mem?bership in the host community?for example, peoplefrom outside (wailairen or waidiren) (Duan 1998). Be?cause the bulk of peasant migrants work in industrial andservices sectors, their migration is commonly associatedwith dagong?literally being employed ?and they arecalled dagongmei (young working women) or dagongzai(young working men). Their meaning to the Chinesecity is mainly tied to their membership in a hardworking,tolerant, cheap, and disposable labor force (Zhou 1998;Knight, Song, and Huaibin 1999). In contrast, the ur-banites are the insiders or the natives?bendiren?whoare entitled to the membership in the city. Differences indialects, cuisine, and regional cultures further segregatethe peasant migrants from the urbanites (Duan 1998).These comments from peasant migrants illustrate theirprecarious and peripheral positions with respect to theurbanites:

When we waidiren walk or bike we give way to the locals.They'll give you a hard time if you're not careful. (NNJYZ1995, 267-70)We don't interact with the locals in Guangzhou . . . wedon't understand their dialect. They look down upon us.(NNJYZ 1995, 234-35)When we have problems we would never go to the localgovernment or Public Security Bureau to get help. Oncethey notice your accent they will ignore you and protect theinterests of the locals. Regardless of whether you are rightor wrong, you are doomed. (NNJYZ 1995, 132-35)Though migrants without local hukou may have

stayed in the city for an extended period of time, they areconsidered temporary migrants in the eye of the state.Many migrants have few options other than returning totheir home villages in the future. A man from Sichuanworking in a repair shop in Guangzhou comments:

Will I be staying in Guangdong for good? Absolutely not.We don't have [local] hukou there, which makes life verydifficult. My children will be going to school soon. Withouta hukou in Guangzhou we cannot afford sending them toschool there. (NNJYZ 1995, 30-34)Peasant migrants are unlikely to have long-term plans inthe city, which is simply viewed as a place of employmentand income gain (Yang 2000), as one constructionworker in Shenzhen comments:

We [migrant workers] are here to make money, and we willtry to be as tolerant as possible. We are tough and will go

any where and will adjust under almost any situation.(NNJYZ 1995, 225-27)

The lack of job security also results in high job turnoverand promotes peasant migrants' emphasis on short-termmonetary gain, as illustrated by another constructionworker in Shenzhen:

Bosses can fire you or fine you as they like. I will immedi?ately switch to a new job if it offers higher wage. (NNJYZ1995, 264-67)The above quotes support the argument that the state

and its institutions and policies, including hukou andthose that distribute urban services, have formalized anopportunity structure that induces and legitimizes labormarket segmentation based on one's resident status inthe city. Though this opportunity structure has beenin place for decades, changes in state policies that permitrural-urban migration but not urban citizenship for peas?ant migrants have brought its segmenting effects to thefore. The rest of this article focuses on a survey I con?ducted in Guangzhou. The analysis is guided by a com?parative approach that seeks to identify the most salientdifferences among three subpopulations that have differ?ent resident statuses in the Chinese city: the nonmi-grants, the permanent migrants, and the temporary mi?grants (Guangdong wailai nongmingong lianhe ketizu1995; Li 1997).

The Guangzhou SurveyBackground

The most appropriate sites for studying migration andlabor market in China are cities that have received largenumbers of permanent and temporary migrants andwhere changes in the urban economy have accelerateddemands for labor. For these reasons, I selected Guang?zhou for this articles quantitative analysis (Figure 1).One of the largest cities in China, Guangzhou is the pro?vincial capital of Guangdong. According to the 1990Census, Guangdong was the most attractive destinationof interprovincial migration and had one of the highestlevels of intraprovincial mobility among all provinces(Fan 1996). The census records a total of 35.3 million in?ternal migrants between 1985 and 1990, of whom 12.5percent, or 4.4 million, were in Guangdong (Table l).4The in-migration rate in Guangdong was 7.8 percent,twice the provincial average (3.9 percent) across China.Temporary migrants were especially prominent in theprovince, as illustrated by a rate of 4-6 percent comparedwith the provincial average of 1.9 percent. The 1995One-Percent Population Sample Survey (SSB 1997)


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Figure 1. The city of Guang?zhou, the Pearl River Delta, andthe Guangdong province. SeeLin (1997, 80) for the delinea-tion of the Pearl River Delta.

again documents significant gaps in the in-migration ratebetween Guangdong and China's provincial average(Table 1).

The 1990 Census estimates a total of 16.2 milliontemporary migrants in China (Table 1). It is widelyknown, however, that census-type surveys underestimatethe actual volume of migration, especially that of tempo?rary migration.5 The 1997 Temporary Population Survey(Gonganbu huzheng guanliju 1997) reports a total of37.3 million temporary migrants6 who had registeredwith local Public Security Bureaus, of whom 28.7 per?cent or 10.7 million were in Guangdong (Table 1). How?ever, even the 1997 survey underestimates temporary mi?grants, because it excludes those who did not registerwith local authorities. The standard estimates of tempo?rary migrants made by scholars and journalists were 70million in the late 1980s and in the range of 100 millionby the mid-1990s (Solinger 1999a, 18). Regardless ofthediscrepancies in estimates, however, Guangdong and itscities are clearly prominent destinations of both perma?nent and temporary migrants.

Guangdong has benefited immensely from its ties andproximity to Hong Kong, a major source of foreign in-

vestment into China since the late 1970s. Such invest?ment has created jobs requiring cheap labor and has beena major reason for the large number of temporary mi?grants in Guangdong. Within the province, migrants areespecially prominent in the Pearl River Delta, whichconsists of special economic zones, large cities, and rap-idly growing urban and rural areas serving as HongKong's production hinterland (Sit 1989; Lin 1997).Guangzhou is part of the Pearl River Delta, is close toHong Kong (150 km), and has received large amounts offoreign investment from and via Hong Kong (Li 1993).Both the diversification of Guangzhou's economy andthe infusion of foreign investment into the city have ex-erted a pull for migrants.

Detailed examinations of migration and labor marketprocesses call for in-depth information that census-typesurveys lack. In order to examine these processes, in 1998I conducted a questionnaire survey in Guangzhou7 thatincludes three types of respondents?305 nonmigrants,300 permanent migrants, and 911 temporary migrants. Alarger number of temporary migrants were included be?cause they are the newest and most dynamic migrants inChinese cities and because their migration and labor


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112 Fan

Table 1. Estimates of Migration Volumes in China and Guangdong

Sources:Gonganbuhuzhengguanliju(1997); SSB (1997). Also, see endnote 4.Notes: Please see endnotes5 and6 for the variations n definitionsamongthe three sources.Migrationrate is defined as the proportionof migrantsamongthepopulation ages 5+ in 1990 for the 1990 Census, which only recordsmigrants ages 5+ . Since the 1995 One-Percent PopulationSample Survey includesmigrantsof all ages,the respective migrationratesarecomputedasproportionsofthe entirepopulationin 1995. Migrationrates forthe 1997 Temporary op?ulation Surveycannot be computedbecause the survey ncludeslargeproportionsof migrantsexcludedfrom the officialpopulationestimates. In all cases,themigrationrateforChina refers o the provincialaverage.

market processes are less well understood. Rather thanexamining only permanent migrants and temporary mi?grants, the survey was designed to reveal a more com?plete picture of the urban labor market involving the ur?ban nonmigrants as well. Though nonmigrants andpermanent migrants both have local hukou, I treat themas different groups because of permanent migrants' selec-tivity and their close ties to state institutions.

The survey sample was arrived at using stratified quotasampling, with stratification across both major occupa-tional categories and geographic districts in Guangzhou.The appendix to this article describes the sampling frame?work and the sampling process in detail. Specifically, thesampling framework aims at including a wide variety ofoccupations and at adjusting for the expansion of com?merce and services in the city between 1990 and 1998. Inthe survey, nonmigrants refers to individuals who hadlived in Guangzhou for at least fifteen years and whosehukou were in Guangzhou; permanent migrants arethose who had moved to Guangzhou since 1990 and whosehukou were in Guangzhou; and temporary migrants re?fers to those who had stayed in Guangzhou for at leastthree months but whose hukou were not in Guangzhou.The survey included only individuals ages 15 or older.

The Guangzhou survey has two limitations that mustbe taken into consideration when interpreting the find?ings. First, a survey of one site, albeit a major city, is notnecessarily representative of other urban areas in China.Second, unlike the census, the size and occupational andgender distributions ofthe survey sample are functions of

the sampling framework (see the appendix). Despitethese limitations, Guangzhou is a major magnet for mi?grants of all kinds, it has a large, diverse, and changingeconomy, and it has a rapidly expanding urban labormarket. For these reasons, Guangzhou is among the bestfield sites for studying the relations between migrationand the urban labor market in China.

Demographic Characteristics

Comparisons between the Guangzhou survey sampleand the 1990 Census's Guangzhou sample8 are instru-mental for assessing the quality of the survey data. Thedetails are reported elsewhere (Fan forthcoming) and arenot repeated in this article, but the similarities betweenthe two samples in age and sex structure, migration ori-gin, and educational attainments are worth noting. As inthe 1990 Census, migrants in the Guangzhou surveywere younger than nonmigrants (Table 2), and both per?manent and temporary migrants were heavily concen?trated in the 15-39 age group. Migrants had higher sexratios than nonmigrants, and permanent migrants hadhigher sex ratios than temporary migrants. The vast ma?jority of nonmigrants and permanent migrants heldnonagricultural registration classification; only a minor-ity of temporary migrants did so. Also, the place-of-birthdata show that compared to nonmigrants and permanentmigrants, who are largely of urban origin (cities andtowns), temporary migrants are mostly of rural origin. Fi?nally, the educational attainments of the survey sample


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Table 2. Demographic and Migration Characteristics:The Guangzhou Survey

* In the survey, industry/business oves areconsidered the same as self-initiated moves.

are similar to those of the Census sample, essentially re-peating the latter's educational ranking, where perma?nent migrants were the most highly educated and tempo?rary migrants the least educated.

As described earlier, the occupational distribution ofthe Guangzhou survey results from a predetermined sam?pling framework. I used the five occupational categoriesconsistent with conventional definitions in China: pro?fessional (including administrative), commerce, services,

industrial, and agriculture. While professional and agri?culture are respectively at the highest and lowest ends ofthe occupational stratum, the statuses of commerce, ser?vices, and industrial work are not clearly established(Stinner, Xu, and Wei 1993). This is partly a result oftheongoing transformation of Chinese cities, where newcommerce, services, and industrial jobs have rapidlyemerged, and partly due to the large variations of job sta?tuses within each category. Though the survey's samplingframework arrived at occupational distributions that aredifferent and less concentrated than those of the Censussample, the former is probably a more realistic represen?tation of Guangzhou's economic structure in the late1990s (see the appendix) than is the latter. In addition,the sampling framework maintains the modes from theCensus sample?namely, industry (32.8 percent) for non?migrants, professional (46.0 percent) for permanent mi?grants, and industry (33.9 percent) for temporary migrants(Table 2), as well as the respective occupational ranking,with permanent migrants at the top and temporary mi?grants at the bottom.

In short, comparisons of the Guangzhou survey sam?ple and the Census' Guangzhou sample indicate that thesurvey is a reasonably good source. Most importantly,the data highlight important socioeconomic differencesamong the three subpopulations, and underscore hukouas an important definition of social and economic strati-fication in Guangzhou. Contrasts in terms of human cap?ital are marked by a hierarchy in educational attainment:permanent migrants are the most highly educated andtemporary migrants the least educated. These discrepan-cies in human capital and residence status have probablyreinforced differentials in labor market opportunities.The next two sections deal more specifically with migra?tion and labor market processes.

Migration Processes: Spatial Patterns, Reasons,and Decision-Making

Permanent migrants and temporary migrants havevastly differing migration processes and patterns. In theGuangzhou survey, the majority of permanent migrantscame from cities and the majority of temporary migrantsoriginated from counties (Table 2), again underscoringthe urban origin of permanent migrants and the rural or?igin of temporary migrants. Respectively, 49.5 percentand 53.9 percent of permanent and temporary migrantswere interprovincial migrants. The central region wasthe most popular source of interprovincial permanentand temporary migrants, but a significant proportion ofpermanent migrants (37.2 percent) came from the east?ern region.9 This pattern suggests that permanent mi-


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114 Fan

grants are more likely than temporary migrants to comefrom more developed origins.

The contrast between permanent migrants and tem?porary migrants is even more marked in their reasons formigration. The standard nine reasons for migrationlisted in Table 2 have their origins in Chinese census-type surveys. It is important to note that these reasonsconnote the means and types of migration and the de?gree of state involvement, rather than the motives be?hind population movement (Fan 1999).10 Job transferand job assignment refer to the state's allocation ofhuman resources by assigning school graduates and trans-ferring workers to specific jobs and regions. Study/trainingrefers to migration to attend schools or training pro?grams. Since admission to higher-education institutes issubject to state planning and is accompanied by localhukou, study/training also reflects significant state in?volvement. By contrast, industry/business refers to self-initiated moves for engaging in industrial, commercial,or trade sectors and is considered migration outside ofstate plan. Friends/relatives refers to migration to seekthe help of friends and relatives, and is mostly associatedwith self-initiated migration. In short, while job trans?fer, job assignment and study/training denote thestate's significant role in monitoring human resourcesand the labor market, industry/business and friends/relatives are most closely identified with market forces.

Study/training, job assignment, and job transferwere the most prominent migration reasons among thesurveyed permanent migrants, while temporary migrantswere overwhelmingly industry/business or self-initiatedmigrants. The importance of study/training reflectsthe concentration of educational institutions in Guang?zhou. Entrants to universities are almost always offeredlocal urban hukou and are by definition permanent mi?grants. The differences in migration reason highlightthe varied opportunities available to migrants. Migrantswhose jobs are allocated by the state and migrants foreducation purposes? within state plan migrants?areeligible for local hukou in cities, while outside of stateplan migrants that move on their own initiatives andare not sponsored by the state are by and large not eligi?ble for local hukou and must appeal to market resources.

Unlike census-type surveys, the Guangzhou surveywas designed to analyze migration motives and decision-making (Table 3). Job search was the most importantmotive among both permanent and temporary migrantssurveyed, and study and increase income were thesecond leading motive respectively for permanent mi?grants and temporary migrants. The prominence of jobsearch and increase income among temporary mi?grants indicates that immediate monetary return was a

Table 3. Migration Considerations: The Guangzhou Survey

* Multipleresponsesare permitted.All responsesare included in the per?centage computation.

key incentive for their moves. Their reasons for leavingtheir origins?63.5 percent citing low income and 19.1percent few jobs, compared with 28.0 percent and 5.7percent, respectively, among permanent migrants?fur?ther highlight the important role of short-term economicreturn. Finally, the reasons for choosing Guangzhou asthe destination11 depict the economic pull of the city.Specifically, higher wages and ease in finding jobs ac-counted for, respectively, 55.3 percent of the responsesby temporary migrants and 49.8 percent of those by per?manent migrants, whereas proximity to origin was notan important reason among either group.

The above analysis of migration considerations, com?bined with earlier observations about migrant origins,suggest that temporary migrants in Guangzhou aremostly upward movers responding to the large gaps inincome and employment opportunities between the cityand their origins (Ma, Liaw, and Zeng 1997). In otherwords, to temporary migrants the push from the origins isas strong as the pull from Guangzhou. Though perma?nent migrants may also be upward movers, their migra?tion origins and considerations suggest that, to them,pull forces are stronger than push forces.

Labor Market Processes: Job Searchand Ownership Sectors

Comparisons of the job-search experiences amongnonmigrants, permanent migrants, and temporary mi-


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grants can shed some light on the processes by which theurban labor market is segmented and how that segmenta?tion is related to resident status. Table 4 shows that in?come was the leading job search criterion of all threegroups and that it was most prominent among temporarymigrants. Nature of work unit, referring specifically tothe ownership sector of the employment (see below),was a criterion for respectively 18.6 percent and 23.0 per?cent of nonmigrants and permanent migrants, but only4-7 percent of temporary migrants. These differencesagain suggest that income was an important incentive forall migration but was especially important for temporarymigrants, whereas nonmonetary job attributes such asownership sector were also high among nonmigrants'and permanent migrants' considerations. In addition,

stability ofthe job was quite important, but locationand benefits were of low importance to all three groups.

Nonmigrants, permanent migrants, and temporarymigrants differ in their sources of information and chan-nels for employment (Table 4)- Though relatives inGuangzhou was the leading source of labor market in?formation for all groups, relatives outside Guangzhou

was a prominent source of information for temporary mi?grants but not for permanent migrants. Social networks,including those from home villages, were the dominantsource of information for temporary migrants. On theother hand, higher proportions of nonmigrants and per?manent migrants than temporary migrants used informa?tion via advertisement and work unit/school. Re?sponses to how did you find this job? indicate that themajority of all three groups, especially temporary mi?grants, relied on their own searches. Respectively, 42.6percent and 30.7 percent of nonmigrants and permanentmigrants found their present jobs by recruitment or

work unit assignment, reasons that accounted for only8.3 percent of temporary migrants. In summary, thoughsocial networks and self-initiation are important to allthree groups, nonmigrants and permanent migrants aremore connected to institutional and organized sourcesand channels than are temporary migrants, who mustrely on informal resources, including social networks inthe origin and in the destination.

Besides occupational distribution, another importantindicator of labor market segmentation is the distribu-

Table 4. Job Search and Sector: The Guangzhou Survey


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116 Fan

tion of ownership sectors?state-owned, collective-owned, new-economy, and self-employed. Both thestate- and the collective-owned sectors are traditionalsocialist-type components of the state sector. This hasshrunk in size in recent years; however, in large andolder cities such as Guangzhou, it remains prominent.At the same time, recent reforms of SOEs and changesin the urban economy have promoted shifts of the laborforce to the nonstate sector, which is relatively new andcomplex and includes employment in enterprises otherthan state-owned and collective-owned enterprises.This subsector, to which I refer in this article as the

new-economy sector, is mainly represented by foreign-invested enterprises and by private, family-owned, andindividually owned enterprises. It is especially character-ized by jobs in industry and services, and is very importantto temporary migrants who have little access to institu?tional resources and whose opportunities mainly lie out?side the state sector. Self-employment is another rela?tively new means of livelihood outside the state sector,involving employers and individuals who own theirbusinesses as opposed to being employees in enterprises.Both the new-economy sector and the self-employedone have rapidly gained prominence since the 1980s(Davis 1999).

SOEs accounted for 43.3 percent of nonmigrants and57.1 percent of permanent migrants, but only 16.4 per?cent of temporary migrants (Table 4). The majority oftemporary migrants were in the new-economy sector.These data again support the notion that nonmigrantsand permanent migrants have greater access to well-established and institutional labor market processes,while temporary migrants are mostly channeled to newerand less institutionalized segments of the urban econ?omy. In addition, roughly one in five of all nonmigrants,permanent migrants, and temporary migrants were in theself-employed sector, indicating that self-employmenthas emerged as an important segment of Guangzhou'slabor market.

Finally, the rate of job turnover was the highestamong temporary migrants and lowest among nonmi?grants (Table 4). The relatively small number of jobsnonmigrants held, despite their older age (Table 2), sug?gests a high level of job stability among them, furtherillustrated by their long duration in their current job(averaging 9.9 years) at the time ofthe survey. Tempo?rary migrants' higher job frequency and shorter durationat the present job depict a relatively high level of jobturnover, which underscores not only their associationwith the more insecure and fluid segments of the labormarket but also their highly income-driven job searchapproaches.

Modeling Permanent and Temporary MigrationEvidence presented thus far indicates that substantial

contrasts exist among the three subpopulations, espe?cially between permanent migrants and temporary mi?grants. To quantify the relationships between residentstatus and the migration process, I analyzed these differ?ences via a logistic regression analysis (Table 5). The de?pendent variable is coded one for permanent migrantsand zero for temporary migrants. In essence, the analysisevaluates how well the independent variables predict mi?gration that is accompanied by urban hukou versusmigration not accompanied by urban hukou. The advan-tage of multivariate methods, such as logistic regression,over descriptive statistics is that an independent vari-able's contribution can be assessed while other indepen?dent variables are held constant. For example, in order toassess the strength of institutional factors, it is importantto isolate the contribution of human capital factors.

Four groups of independent variables are included inthe analysis: demographic, location, motive, and access.It is expected that individuals who are more highly edu?cated, from urban backgrounds, and relatively less con?cerned with monetary return and who have greater ac?cess to state-sponsored and institutional opportunitiesare more likely to be permanent migrants, while indi?viduals who are less highly educated, from rural areas,and highly motivated by monetary return and who relyon their own resources are more likely to be temporarymigrants.

A relatively high p2 (0.65) and a high percentage ofcorrectly classified observations (93.2 percent) suggestthat the independent variables as a whole are successfulin identifying the salient differences between permanentmigrants and temporary migrants (Table 5). Becauseodds ratios are unit-dependent, they are reported for ref?erence purpose only. The size of standardized regressioncoefficients and associated significance tests are more re?liable indicators of the relative importance of the inde?pendent variables in predicting the permanent migrantversus temporary migrant outcome.The overall results support the expectations describedearlier. The two dummy variables, SENIOR HIGH andABOVE SENIOR HIGH, are both significant and posi-tively related to permanent migration. The coefficientof ABOVE SENIOR HIGH is the second largest amongall independent variables, which suggests that highereducation is especially influential in increasing the likeli?hood of permanent migration versus temporary migration.The three location variables?INTRAPROVINCIAL,INTERPROVINCIAL, and PLACE OF BIRTH?are allsignificant and positively related to permanent migra-


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Table 5. Logistic Regression on Permanent and Temporary Migrants: The Guangzhou Survey

Independent VariableStandardizedRegressionCoefficient

WaldStatistic

OddsRatio

DemographicEDUCATION (reference: below senior high)*SENIOR HIGH*ABOVE SENIOR HIGH

LocationORIGIN (reference: central and western regions)*INTRAPROVINCIAL

*INTERPROVINCIAL (eastern region = 1)*PLACE OF BIRTH (urban = 1)Motive (reference: non-income- or job-related)

*INCOME/JOBAccess

*SELF-INITIATEDJOB INFORMATION(reference: non^Guangzhou or institutional sources)*GUANGZHOU

*INSTITUTIONModel chi-square? 2 log likelihood with intercept? 2 log likelihood of modelp2Percentage correctly classifiedNumber of casesDegrees of freedomNotes:1. Dependentvariable s coded 0 fortemporarymigrantsand 1 forpermanentmigrants.2. * Indicatesdummyvariable.3. Significancelevels are indicatedas follows:** is 0.05, *** is 0.01, and **** is 0.001.

4- p2? 1 ? (?2 log likelihoodof model/ ?2 log likelihood with intercept).

tion, indicating that migrants from within Guangdong,from the eastern region, and from urban origins are morelikely to be permanent migrants.

INCOME/JOB is coded one for migrants who consid?ered income increase or job search as the main motivefor migration, and zero otherwise. Though it is not signif?icant, its negative sign suggests that migrants mostdriven by income and job-related motives are more likelyto be temporary migrants. SELF-INITIATED is codedone for industry/business or self-initiated migrationand zero for other types of migration, and is the most in-fluential independent variable in the analysis. Its nega?tive sign indicates that self-initiated migrants withoutgovernment sponsorship are more likely to be temporarymigrants. Finally, both JOB INFORMATION variablesare positively and significantly related to permanentmigration. GUANGZHOU is coded one if relativesin Guangzhou or agencies in Guangzhou were themain source of information about the labor market, andINSTITUTION is coded one if advertisement or

work unit/school was the main source. They are com-

pared with the reference group of variables relativesoutside Guangzhou, agencies outside Guangzhou,and other (Table 3). The results suggest that migrantshaving greater access to information in Guangzhou andto institutional sources are more likely to be permanentmigrants.

The logistic regression results point to the importantroles of institutional factors such as government sponsor-ship and channels for employment independent of mi?grants' attributes, such as their human capital and theirorigins. In other words, high education and urban back?ground only partially explain permanent migrants' abil?ity to obtain urban hukou. Likewise, temporary migrants'low education and rural backgrounds are not the onlyreasons for their not obtaining urban hukou. This findingunderscores structural mechanisms whereby hukou sta?tus is not simply associated with the abled and competi-tive but is, above all, a gate-keeping mechanism thatstratifies the urban labor market and relegates peasantmigrants, regardless of their abilities, to peripheral, inse-cure, and inferior positions.


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118 Fan

Labor Market Processes: Entering the LaborMarket, Sectoral and Occupational Shifts

The first job one gets and whether one stays in thesame ownership sector and occupation during job changecan shed further light on the opportunity structure in thelabor market. To this end, I analyzed the shifts that ac-company the change from a previous nonworking statusor job to the present job. Because very few respondentsengaged in agriculture during the time of the Guangzhousurvey (see Table 2), they are omitted from this analysis.

By first-time job seekers, I mean individuals whosejobs at the time of the survey were their first jobs?whoaccounted for 30.1 percent of all respondents?plusthose who were agricultural workers prior to holding thepresent job.12 In other words, first-time job seekers in?clude all those who entered the urban labor market forthe first time. The high proportions of nonmigrants andpermanent migrants entering SOEs comprise a testi-mony to these migrants' access to institutional resourcessuch as job assignment by state agencies, and highlightthe association between state-sector employment and lo?cal hukou (Figure 2). On the other hand, the majority oftemporary migrants entered the new-economy sector,further supporting the argument that they have little ac?cess to state-sponsored employment.

For respondents who were not first-time job seekers, Icomputed the ownership sectors' retention rates and des-tination rates. Retention rate defined as the percentageof respondents in one sector that remained in the samesector after job change, is an indicator of the ownershipsectors' relative strengths to retain labor. The rates aresector-specific and do not add up to 100 (Figures 2 and 3).Destination rate, defined as the percentage of sectoral-shift respondents who shifted into a specific sector, de?notes the relative abilities of sectors to attract labor fromother sectors. Destination rates are group-specific and addup to 100. Both retention rates and destination rates mea?sure the respective sectors' attractiveness to labor. Most ofall, however, they illustrate the varied opportunities thesectors offer to workers with different resident statuses.

The highest retention rates were in SOEs and thenew-economy sector for nonmigrants, the self-employedsector and SOEs for permanent migrants, and the new-economy sector for temporary migrants (Figure 2).Among all three groups, however, the destination ratesof the new-economy and self-employed sectors were thehighest. These results indicate that while SOEs are still afavorable sector for nonmigrants and permanent migrants,who enjoyed access to state-sponsored employment tobegin with, jobs in the new-economy and self-employmentsectors are increasingly attractive. In particular, the high

First-time ob seekers

Non-migrantsPermanentigrantsemporaryigrantsFigure 2. Ownership sectors: The Guangzhou survey.

retention and destination rates of the self-employed sec?tor among permanent migrants suggest that a shift fromstate-sponsored work to self-employment has occurredamong such migrants. To temporary migrants, the new-economy sector is clearly the most prominent?largeproportions of them entered that sector, stayed in thatsector despite job change, or shifted to that sector fromother sectors. Besides highlighting the differing opportu?nities among the three groups of respondents, the find?ings underscore the increased diversity and complexity ofGuangzhou's labor market.

The distributions of first-time job seekers, retentionrates, and destinations rates by occupation are not func?tions of the survey design (Figure 3). For nonmigrants,the most popular occupation for first-time job seekerswas industrial work, reflecting the industrialized econ?omy of Guangzhou. For permanent migrants, it was pro?fessional work, which was partly a result of their highlevel of education and partly a result of their access to in?stitutional resources. Industrial and services employment


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First-time ob seekers

NoiwnigrantsPermanentigrantsemporaryigrantsDestination rates

Non-migrantsPermanentigrantsemporary

Figure 3. Occupations: The Guangzhou survey.

were the leading occupations for temporary migrantsthat were first-time job seekers. These differences repre?sent strong evidence for the argument that entrance andaccess to the labor market is heavily dependent on one'sresident status.

The overall high occupational retention rates suggestthat large proportions of respondents stayed in the sameoccupations despite job change. Among the four occupa?tions, commerce had the highest retention rates. In par?ticular, 92.6 percent of permanent migrants previously incommerce remained in that occupation despite jobchange, which appears to be associated with their highretention rate in the self-employed sector that was ob?served earlier (Figure 2). Commerce was the most popu?lar occupation to which to shift, especially for permanentmigrants (Figure 3). Even though commerce was not themost popular sector among first-time job seekers, its highretention and destination rates indicate that Guang?zhou's economy is becoming more commercialized andthat commerce is the most attractive, and the most prof-

itable, occupation for those already in the labor market.The prominence of permanent migrants in commercesuggests that they are the most competitive group and aremore likely than nonmigrants and temporary migrants tosucceed in new and thriving occupations.

The above data highlight the increasing commercial-ization of Guangzhou's economy, the heterogeneity of itslabor market, and the popularity of self-employment.Above all, the findings underscore an opportunity struc?ture defined by resident status. Permanent migrants andnonmigrants enjoy state-sponsored employment resourceswhen they first enter the urban labor market; as theychange jobs, such migrants are especially competitive inremaining in or moving to thriving sectors and occupa?tions, particularly self-employment and commerce. Incontrast, temporary migrants have limited access to in?stitutional resources and prestigious occupations whenthey enter the labor market, and are therefore highly rep?resented in new-economy jobs and in services and indus?trial work. During job change, temporary migrants areonce again less competitively able than those with localhukou to shift to popular occupations such as commerce.

Summary and ConclusionIn this article, I have argued that established theoret?

ical approaches for studying the interaction between mi?gration and labor market neglect institutions in generaland state institutions in particular. In transitional econ?omies, such as those in Russia and China, that are nego-tiating the difficult match between plan and market, in?vestigations of institutions are especially revealing. TheChinese state is a critical determinant ofthe opportunitystructure that shapes individuals' migration to cities andtheir participation in the urban labor market. The linkbetween varied opportunities and resident status is in-duced and legitimized by gate-keeping institutions. Thehukou system functions as a society-wide sorting mecha?nism that allocates urban citizenship to within stateplan migrants with close affiliations with the state. Thesepermanent migrants are, in essence, the elite in the cityand are in more prestigious positions than even the ur?ban natives. In contrast, most peasant migrants are de?nied local hukou in the city. The qualitative data from a1995 survey in Sichuan and Anhui support the notionthat peasant migrants' outsider institutional positionsrender them at the bottom of the urban socioeconomicand labor market strata.

Results from the 1998 Guangzhou survey I conductedsupport the argument that an opportunity structure de?fined by hukou, together with human capital-type factors


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120 Fan

such as education, results in a socioeconomic hierarchyin which permanent migrants are the most prestigious,urban nonmigrants are in the middle, and temporary mi?grants are the least prestigious. This opportunity struc?ture has led to varied migration processes between per?manent and temporary migrants and differing labormarket processes among the three subpopulations. Per?manent migrants have the advantage to begin with, asthey are more highly educated and come from more de?veloped locations. Their access to institutional resourcesand government channels further privilege them in thelabor market. The net result is that they have the mostprestigious occupations, they are the most competitive inthe labor market, and they are more likely than nonmi?grants and temporary migrants to succeed in new sectors.Though urban nonmigrants also have urban hukou andassociated benefits, they occupy somewhat lower posi?tions in the labor market hierarchy than permanent mi?grants. Temporary migrants are dislocated from institu?tional resources, are crowded into peripheral segments,and are less capable of advancing in the labor market.Their marginalized positions leave them few optionsother than relying on informal sources and striving forimmediate monetary gains.

Though differences in human capital and back-grounds are important factors, statistical analyses in thisarticle have shown that individuals' resident status exertsindependent and substantial effects on their labor mar?ket processes. Their labor market outcomes, especially interms of income and benefits, are also significantly differ?ent (as reported elsewhere; see Fan 2001). Guangzhou'sattractiveness to migrants, its diverse and commercial-ized economy, and its rapidly growing labor market sug?gest that these observations may well be repeated inother large Chinese cities that have also received numer?ous migrants. This article's findings suggest that in theChinese city, state institutions not only shape migrationprocesses and labor market segmentation but are also en-gendering a new social order marked by institution-backed socioeconomic stratifications.

The Chinese urban labor market is complex. Its com?plexity is due in no small part to the persistent role ofthestate in monitoring the way in which plan and marketcoexist. It is this institutional factor that undermines theapplicability of existing theories. The neoclassical andbehavioral approaches do not specifically address the roleof institutions. The labor market segmentation theoryoffers a useful guide, but it needs to expand to incorpo?rate the role of the state and state institutions. An insti?tutional perspective is especially necessary in socialistand transitional economies in which segmentation isvery much defined by institutional affiliations and status.

AppendixA sampling framework with stratification both across

occupational categories and the eight urban districts inGuangzhou was used to guide the sampling process.Using the distribution of major occupations in Guang?zhou from the 1990 Census as a basis, four types of adjust?ments were made. I made the first adjustment to reflectthe changes in the city's economic structure between1990 and 1998, by increasing the relative proportions ofcommerce and services. Then, I adjusted the occupa?tional proportions ofthe three types of subpopulations inorder to reflect their likely occupational distributions.The actual occupational distributions of these threegroups in Guangzhou are not known, because officialdata do not include migrants that have not registeredwith local authorities. Therefore, I relied on informantsin Guangzhou, including State Statistical Bureau surveyspecialists, as well as a variety of scholarly and journalis-tic sources that estimated the breakdowns of occupa?tional categories (e.g., management, street vendors, gar-ment workers, etc.) among migrants in Guangzhou (Fan2001). Third, in order to facilitate comparison amongthe three subpopulations, I made adjustments to ensurethat sufficient numbers of them in respective occupa?tional categories were included. For example, I adjustedupward the proportions of nonmigrants and permanentmigrants in the categories under commerce. Finally, I al-located roughly equal proportions to men and women,except for occupational categories that are clearly domi?nated by one sex (e.g., nannies, who are predominantlywomen, and construction workers, who are predomi?nantly male).

The geographic proportions for the initial samplingframework across the eight urban districts of Guangzhouwere derived based on existing data of the geographicdistributions of population, nonagricultural population,and migrants in Guangzhou, as well as the settlementhistory of individual urban districts. For example, Yuexiuand Haizhu were allocated larger proportions becausethey are among the oldest and most urban parts ofGuangzhou, and they are known for increasing concen?tration of migrants during the 1990s. Conversely, smallerproportions were allocated to suburban districts, such asBaiyun, that are less known for migrant concentration.

Using an initial sampling framework, a team of six in-terviewers employed the quota-sampling technique andrandomly selected individuals who satisfied the occupa?tional and geographical criteria until the predeterminednumbers or proportions in the initial sampling frame?work were reached. Each selected respondent was given aquestionnaire to fill out with the help of the interviewer.


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During the survey, fine adjustments were made to thesampling framework in cases where the predeterminednumbers or proportions were judged too high or too lowbased on our field observations. For example, it was ex-tremely difficult to find industrial workers in Guangzhouwho were permanent migrants. Accordingly, the propor?tions of permanent migrants in the industrial categorywere adjusted downward. By and large, however, we wereable to follow quite closely the initial sampling frame?work. The occupational breakdowns in Table 2 summa-rize the final sampling framework by major occupation.

In this study, the quota-sampling technique is moreappropriate than the traditional random samplingmethod based on databases provided by local authorities,for three reasons. First, official databases inevitably over-look temporary migrants who did not obtain proper pa-perwork such as the temporary residence permit. My in?formants in Guangzhou and the survey both suggest thata large proportion of temporary migrants choose not toobtain proper permits because of the fees involved andbecause the permit requirement may not be strictly en-forced. For example, among the temporary migrants in?cluded in the survey, 19.0 percent did not obtain tempo?rary residence permits. The quota-sampling techniqueallows us to examine this important group, which is eas-ily missed using official databases. Second, random sam?pling based on official databases makes it difficult to sat-isfy the occupational stratification criterion outlinedabove. Third, a survey not based on official databasespermits more in-depth questions to be asked.

Though the technique described above did not yield arepresentative and random sample, specific strategieswere employed to increase as much as possible the rep-resentativeness, randomness, and quality of the surveydata. First of all, the occupational and geographical strat-ifications outlined earlier reduced possible occupationaland spatial skewedness of the data. Second, severalguidelines were used to reduce possible biases ofthe data.For example, no more than one person per householdand one person per work place were interviewed, exceptunder special circumstances. If significant variations inresident status (nonmigrants, permanent migrants, andtemporary migrants) and in other demographic dimen-sions such as age, income, and education existed withinthe household or workplace, we allowed a maximum oftwo interviewees per household and four intervieweesper workplace. Third, I employed a total of only six inter-viewers in order to minimize possible inconsistenciesduring the interviewing process. All six interviewers hadhad extensive prior experience in conducting question-naire surveys in Guangzhou, and all were trained specifi-cally for administering the questionnaire used in the

study. Finally, a pilot survey was conducted in December1997, six months before the actual survey, which testedthe questionnaire and identified and resolved possible in-consistencies among the six interviewers.

AcknowledgmentsThe research on which this article is based was funded

by the National Science Foundation (SBR-9618500),the Luce Foundation, and the UCLA Academic Senate.I am grateful to Ling Li for her major role in administer-ing the Guangzhou survey, and to Daming Zhou andZhaoyuan Luo for helping me access the data from theSichuan and Anhui survey. I

the elite, the natves, and the outsiders - migration and labor market segmentation in urban china

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