Social Networks and Workers’ Earnings in Contemporary China

Abstract

Guanxi is the central form of social capital in Chinese society that provides access to resources, assets, and benefits that facilitate social status and social mobility. Substantial empirical research has documented the importance of guanxi networks in accessing resources for getting good jobs, moving up to better jobs, and achieving higher wages. Chinese Lunar New Year is a special occasion of cultural and social significance to cultivate and maintain guanxi networks. We thus conceptualize guanxi networks as the visiting networks during the Chinese New Year celebration. Using the 2008 Chinese General Social Survey, we construct five measures of the Chinese New Year greeting networks and assess their impact on workers’ earnings as well as gender differences in their effects on earnings. We also consider two major structural constraints—the hukou and social class—that affect the extent of one’s social networks and earnings. Our findings not only confirm the overall positive effects of the Chinese New Year greeting networks on earnings but also offer nuances that enhance the understanding of how guanxi networks as a manifestation of social capital embedded in Chinese traditional culture work in the contemporary era and intensify gender gaps.