The Elite, the Natives, and the Outsiders: Migration and Labor Market Segmentation in Urban China

Established migration theories are mostly based on capitalist market economies and downplay the role of institutions in internal migration and labor market processes. In socialist and transitional economies such as those in Russia and China, however, investigations of migration and the labor market must begin by examining the nature and consequences of state institutions. In this article, I argue that the migration and labor market processes in Chinese cities are deeply influenced by an institution-based opportunity structure. The household registration ( hukou ) system, in particular, is interwoven with distribution of services and job opportunities. Most peasants who enter cities in response to increased demands for cheap labor are not granted urban citizenship and are treated as “outsiders” to the urban society. The experiences of these “temporary migrants” contrast with those of “permanent migrants” who are state-sponsored or have access to institutional resources. Using qualitative accounts from a 1995 village-level survey in Sichuan and Anhui and quantitative data from a survey I conducted in Guangzhou in 1998, this article examines the most salient differences among the three subpopulations with different resident statuses: nonmigrant urban natives, permanent migrants, and temporary migrants. I show that resident status is central to explaining migration processes and labor market segmentation in the Chinese city. The findings indicate that in terms of human capital attributes, mobility resources, and labor market entry and shifts, permanent migrants are the most privileged and successful 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 between internal migration and labor market development in transitional economies, and suggest that in these economies the state deepens the bifurcation effects about which labor market segmentation theory is concerned.