Feeling Good about the Iron Rice Bowl: Economic Sectors and Happiness in Post-Reform Urban China

Jia Wang, Hong Kong University of Science and Technology

Situated in China’s market transition, this study examines the relationship between economic sectors and individuals’ happiness in post-reform urban China. Using datasets from the Chinese General Social Surveys 2003, 2006 and 2008, we find that workers in the state sector enjoy a subjective premium in well-being – reporting significantly higher levels of happiness than their counterparts in the private sector. We also find that those remaining in the state sector report being significantly happier than do former state sector workers who moved into the private sector, whether the move was voluntary or involuntary. Sectoral disparity in the allocation of social welfare benefits serves as the primary nexus linking state-to-private mobility and happiness. Those who made voluntarily state-to-private moves experienced a trade-off in enjoying higher payoffs while losing job security, whereas involuntary downward mobility left long-term psychological scars on those who experienced layoffs or unemployment.