CSI’s Inequality Discussion Groups bring together Cornell faculty and graduate students from around campus to discuss and improve their in-progress research.

Zhipeng Zhou (Sociology, Cornell)

Title: Sectoral Differences in Employment Precarity and Labor Income Inequality: The Effect of Market Transition in China

Abstract: Despite widespread evidence that neoliberal marketization in industrial economies has expanded precarious employment and deepened income inequality, how does large-scale marketization itself shape the income consequences of precarious work? This study examines two distinct sources of precarity in contractual employment relations, embedded in the institution of work unit ownership during China’s market transition. Under market capitalism in the private sector, employers pay lower income for short-term employees to balance stability and flexibility, whereas state-sector employers, constrained by socialist economic egalitarianism and staffing demands, preserve privileged labor rents for permanent employees while exposing short-term employees to market competition. Using data from the nationally representative China Family Panel Survey 2018 and leveraging regional marketization variations, empirical results show that the state sector imposes a larger income penalty for short-term employment despite lower overall precarity levels. However, in more marketized provinces, this penalty declines in the state sector – reducing employment-group and overall income inequality— while in the private sector, it increases, reinforcing employment-group and overall income inequality. These patterns are most pronounced among lower-income workers, with sectoral differences concentrated between government agencies and private enterprises. Findings challenge assumptions that marketization uniformly worsens precarity and highlight the institutional foundations of inequality in contemporary China.