Hukou stratification, class structure, and earnings in transitional China

The massive economic transformation in China has triggered a vigorous scholarly debate on whether the persistent power of the state or the increasing market liberalization is the main driving force of inequality. In this article, we attempt to understand this debate through the lens of two coexisting stratification systems––the longstanding hukou (household registration) system and an emerging class structure. Using data from the Chinese General Social Survey from 2008 to 2015, we develop new typologies for hukou stratification and class structure and examine their relative contributions in determining workers’ earnings. We further investigate differences in their effects between the Inland and Coastal regions. We find that class ranks ahead of education and hukou as the strongest determinant of earnings in China as a whole. Regionally, hukou and class are strong determinants of earnings, but hukou has a relatively stronger effect in Inland China. The findings shed light on the changing stratification dynamics in transitional China and contribute to the literature on the market transition debate.