The Determinants of employment choice by migrant workers in China: SOEs and non-SOEs

This paper mainly focuses on the employment choice in different ownership enterprises for migrant workers (nongmingong) in China. We pay close attention on migrant workers, since they have been a group with an unprecedented and rapidly increasing flow entry into cities, which have drawn a great attention by policymakers and researchers. We divide the ownership enterprises into state-owned enterprises (SOEs) and non state-owned enterprises (non-SOEs) because migrant workers in different types of enterprises are subjected to the different treatments in the aspects of labor allocation, wage determination and benefits compared to urbanites, therefore, influencing the employment choice of migrant workers. In addition, the self-employed will also be identified with SOEs and non-SOEs because it has become a distinct employment type for migrant workers. Although there are few studies on the employment choice of rural migrants in different enterprises, little attention has been paid on investigating the changes of employment choice of migrant workers using broad explanatory variables with cross-section data after the economic reform of China in 1978. In light of this fact, this paper will answer the following question: what are the determinants of employment choice in SOEs, non-SOEs and self-employed for migrant workers? This question will be comparatively analyzed using multinomial logit model and heckman model based on the personal characteristics, human capital variables and socio-economic characteristics with CHIP database. Our preliminary descriptive analyses demonstrate that migrant workers mainly employed in non-SOEs in 1995 while the self-employed becomes their prefer choice in 2002 accounting for 60%.