Chinese Minority Income Disparity in Urumqi: An Analysis of Han-Ugyhur Labour Market Outcomes in the Formal and Informal Economies

Abstract

Participation in the informal economy has skyrocketed in China, coinciding with emerging labour markets that are segmented along lines of ethnicity, gender and migrant status. While a large body of literature examines migrant and female outcomes in the labour market, minority outcomes are much less understood in China. Information on minority employment in China’s informal economy is even more sparse. To help fill this “minority” gap in China, the author uses field survey data collected in Urumqi in July 2008 to reveal the extent of income disparity between the formal and informal sectors as well as within each sector, for ethnic, gender and migrant status subgroups.

The statistical analysis generated three key results: (i) the accumulation of human capital positively influences income, but only in the formal sector; (ii) income disparity exists along the lines of ethnicity, gender and migrant status, and is most pronounced for Uyghur minorities in both the formal and informal sectors; and (iii) workers in the informal sector earn 22 per cent less than workers in the formal sector, and workers in the state-owned enterprises earn 15.3 per cent more than non-state workers. Findings are posited within a policy-relevant context and can be used to guide future development and ethnic policy in the region.

Keywords: China, Xinjiang, migration, Uyghur, Han, ethnicity, inequality.

JEL Classification: J610, O150, O180, R230