The Segmentation of Urban Housing and Labor Markets in China

With rapid economic restructuring, large-scale population migration and market-oriented housing commercialization, China’s urban residents have experienced increasing segregation of residential spaces. How such socio-spatial stratifications have impacted their jobs has significant policy implications and deserves a systematic investigation. Using the Sixth Census (2010) data with detailed geographic information for Shanghai, we examine the residential patterns of residents and particularly investigate how the patterns of local residents’ residential clustering are different as compared to those of migrants. We find that rural migrants in Shanghai feature a much higher level of residential segregation as compared to urban locals and urban migrants, with considerable concentration in the outskirts of the city. Meanwhile, data suggests that rural migrants tend to cluster in low-skilled and low-paying jobs at the bottom hierarchy of the urban labor market. We then investigate how the neighborhood contexts are associated with individuals’ employment outcomes. It shows that migrant enclave residence is associated with positive employment outcomes for rural migrants, indicating the strong social networks that exist in these neighborhoods. Nonetheless, the positive social network effect is not shared by urban migrants or urban natives. Several robustness checks have been implemented to safeguard these findings. Finally we discuss the policy implications of our findings and potential extension of this research in the future.