Paths to private entrepreneurship: Markets and occupational mobility in rural China

Economic transition from plan to market has created new income opportunities, but access to such opportunities is not equal. Past research has stimulated a debate about which group---elite insiders or well-educated non-elites---has preferential access. Recent research begins to emphasize multiple patterns of access. Which group is favored varies widely with such factors as the extensiveness of regime change and institutional barriers to asset appropriation. Within this line of research, I highlight the impact of a particular feature of the economy, the scale of firms that dominate the private sector. I argue that transitional economies propelled by the massive entry of small enterprises allow for a more equal access, politically and educationally. By contrast, transitional economies driven by large corporate firms are more likely to favor political and educational elites. I test this argument in rural China, where the private sector has been dominated by tens of millions of small-holding household enterprises in the last two decades.; Analysis of nationally representative data collected in 1996 reveals a pattern of equal access. I find a dual elite structure, shared resource access, and low barriers to entry for female, less educated and non-cadres. A dual elite structure is developed as the majority of cadres hold onto cadre posts without moving into the private sector while the vast majority of entrepreneurs come from non-cadre backgrounds; Access to public resources is shared because the number of cadre entrepreneurs is too small to monopolize all the resources and opportunities; The barriers to entry are low politically and educationally because entrepreneurial opportunities are so widespread that political capital and human capital are not requisite for access to such opportunities. I suggest future research to test whether the pattern of access is comparatively less equal in transitional economies where large corporate firms are more dominant.