This paper explored the underlying logic of social differentiation among State Owned Enterprise (SOE) workers in the process of most recent waves of institutional transformations in northeast China, a region that has received insufficient research attention from sociologists. There, many SOE workers have been laid off since 1998, some of them willingly went to markets for new jobs, others struggled for work opportunities in and outside SOEs, and of course still others can preserve or increase their advantages....[ Read more ]

This paper explored the underlying logic of social differentiation among State Owned Enterprise (SOE) workers in the process of most recent waves of institutional transformations in northeast China, a region that has received insufficient research attention from sociologists. There, many SOE workers have been laid off since 1998, some of them willingly went to markets for new jobs, others struggled for work opportunities in and outside SOEs, and of course still others can preserve or increase their advantages.

The studies of social stratification have long been influenced by three approaches: human capital theory, structuralism, and institutionalism. The general theoretical concern of this study is: which of these theories is more appropriate to explain the differentiation of SOE workers? I propose an integrative approach to address this question within the framework of historical institutionalism, where the operation of institution is characterized by two special features of asymmetries of power and path dependence. It incorporates some individual, organizational, and contextual variables into the empirical analysis, examining the differentiation process of the income inequality trend and the employment opportunities among SOE workers.

While drawing on data from 50 SOEs, my findings suggest that certain kinds of the logic of social differentiation are always interwoven with the institutional context at the time and could not be simplistically explained in terms of differentiation alone. In general, the advantages either on the job opportunities or income attainment must not only stem from the workers' superior human capital, political capital and social capital, but also are determined by the characteristics of organizations. But my argument is that there is a missing link between those variables and the mechanism of differentiation. It is the state, organization, and market that determine the dynamics of the differentiation of SOE workers, which implied that the multi-facet logic can account for who get ahead in the institutional transformation. Furthermore, the study suggests that the perspective of path dependence and asymmetries of power has more strength to explain the differentiation of SOE workers.