There are some severely biased views in the on-going market transition debate: nearly all relevant research publications consider the post-1979 transformation of China as the change from a planned system to a market system, overlooking the modernization transition featured by tremendous industrial growth which China has been experiencing. This transition includes rapid changes of the labor market structure, but in the research of market transition, labor market structure is instead regarded as a constant, cohorts not changing with time. This biased view leads to the incorrect treatment that first-job attainment of different generations are analyzed in one model, resulting in the fallibility of the conclusion on market transition effects to stratification order. In this research I attemp...[ Read more ]

There are some severely biased views in the on-going market transition debate: nearly all relevant research publications consider the post-1979 transformation of China as the change from a planned system to a market system, overlooking the modernization transition featured by tremendous industrial growth which China has been experiencing. This transition includes rapid changes of the labor market structure, but in the research of market transition, labor market structure is instead regarded as a constant, cohorts not changing with time. This biased view leads to the incorrect treatment that first-job attainment of different generations are analyzed in one model, resulting in the fallibility of the conclusion on market transition effects to stratification order. In this research I attempt to revolve this problem by exploring the theoretical implication of two different models of transition: gradual transition and radical transition.

I argue that the general empirical research model of market transition debate has defects when it is applied to China—the model fatally lacks the control of labor market sectors, and does not consider an interaction effect between age and labor market sectors. The absence of these two important variables leads to the biased estimation in previous empirical research. My contribution to this research is to compare China with East Europe with the analytical focus on the first job entry and intra-generation mobility.

In this thesis a method is proposed to separate the modernization effects and market transition effects; meanwhile, an improved transition research model—APC model— is formulated to help assess the impacts of the rapid changing labor market structure. Based on the new model, it is found that in the status attainment process and intra-generational occupational mobility process, there exist age, cohort, and period effects which are caused by modernization transition and market transition. Modernization transition and market transition have different impacts on the stratification orders. The effects of modernization transition are meat to create new positions that are disproportionately distributed, which have more higher-rank position than lower. Market transition has the effects mostly the relative growth on declines of position between private and public sectors. Meanwhile both types of transition have the joint effects on the position composition in the labor market. It is found that individuals who enter private sectors in later years obtain higher income, and this is because private sectors gradually developed and transformed from the secondary sector to the primary sector. This is the result of the modernization of private sectors and not that of market transition

Following Polanyi and Andersen, I analyze the differential roles of state and markets as they respectively strengthen the concurrent and separate process of “labor commercialization” and “labor decommercialization”. Empirically, I examine the effects of these two processes on career duration of retires among the European countries of mature market, countries of transforming markets in East Europe, and the Chinese market of great reform. The statistical analyses are designed to test three research hypothesis about career duration.

It is revealed that during market transition, both processes of “labor commercialization” and “labor decommercialization” coexist. The recess of the power of state does not necessarily lead to the progress of the market. On the contrary, the strengthening of providing the welfare by the state on the labor decommercialization is the important impetus to accelerate the market transition and growth..

The data from Chinese General Social Survey of 2003 provide empirical the above-descried arguments and model.