Self-employment and inequality

Xinxin Ma

Chapter 18 in Handbook on Inequality in China, 2025, pp 430-454 from Edward Elgar Publishing

Abstract: This study focuses on self-employment and income inequality in urban China from the perspectives of institutional transformation and empirical studies. It finds that the Chinese government transitioned its policies from prohibiting self-employment to permitting and promoting its development during the market-oriented reform period. These policy reforms have increased the number of rural migrant workers, laid-off workers of the state-owned enterprises, and business startups, leading to the rapid development of self-employment in urban China since the 1990s. The literature review indicates inconsistencies in the definitions of the informal sector, including the self-employment sector. Research on the mechanisms of entry into the self-employment sector is limited, and there are no consistent results on income gaps between the formal and informal sectors in China. This study also discusses recent issues such as technological progress, income inequality, and self-employment from skill- and task-biased technological change perspectives. Finally, it highlights several challenges for future research.

Keywords: Self-employment; Income inequality; Informal sector; Rural migrant worker; China (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035317790
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