Labor Market Segmentation in Urumqi, Xinjiang: Exposing Labor Market Segments and Testing the Relationship between Migration and Segmentation

Labor market segmentation and migration are two phenomena that are dramatically reshaping the spatial, economic, and social relationships of many urban cities in both developed and developing countries. To this point, the bulk of Chinese literature falls within the context of area studies, without much effort to link Chinese migration and emerging labor market outcomes to larger global trends and discourse. This research attempts to link the body of internal Chinese migration and emerging labor markets to labor market segmentation theory, primarily developed by urban economists and sociologists. My findings provide evidence that applying labor market segmentation theory to examine emerging markets in China offers fruitful results that help to identify the new urban stratification that exists in China. I employ a set of quantitative methods using employee-level field data that I collected in Urumqi in 2008 to identify distinct segments within Urumqi's labor market and argue that migration is a major driver of labor market segmentation. Cluster analysis shows Uyghur minorities and women are found to be overwhelmingly concentrated in the lower sector, composed mostly of "bad" jobs. Discriminant analysis reveals that migrant status and ethnicity are the most important variables that deepen the gap among the labor market segments. The social inequality created as a result of market segmentation can partially explain Uyghur discontent in the region and the July 2009 riots, one of the worst riots in Xinjiang's modern history.