The Determinants of Employment Choice of Rural Migrant Workers in China: SOEs and Non-SOEs

Ownership structure is endogenous to the formation of the economic entity in China. This paper investigates the determinants of employment choice of rural migrant workers across state-owned enterprises (SOEs) and various subtypes of non-state owned enterprises (non-SOEs). Two self-selection models are adopted to comparatively identify how the unobserved factors related to the migration decision affect employment choice. Using pooled cross-section data for 1995 and 2002, results indicate that employment choice is positively selected with respect to the unobserved characteristics. Furthermore, wage and pension benefits exhibit positive relationships with the probability of employment in either type of enterprise.