Danwei profitability and earnings inequality in Urban China

Yu Xie, Xiaogang Wu

Research output: Contribution to journalArticlepeer-review

81 Scopus citations


Prior research has debated the relative importance of such factors as human capital, political capital and region in determining workers' earnings in reform-era urban China. This article argues that a main agent of social stratification in contemporary China continues to be the danwei, the work unit. Using data from a 1999 survey we conducted in three large Chinese cities, Wuhan, Shanghai and Xi'an, we assess the extent to which workers' earnings (including regular wages, bonuses and subsidies) depend on the profitability of their danwei. Results show that the financial situation of the danwei is one of the most important determinants of earnings in today's urban China. Furthermore, the importance of danwei profitability does not vary by city or by employment sector.

Original languageEnglish (US)
Pages (from-to)558-581
Number of pages24
JournalChina Quarterly
Issue number195
StatePublished - 2008

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Development
  • Political Science and International Relations


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