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  • 2023
  • Working Paper

State Employment as a Strategy of Autocratic Control in China

By: Jaya Y. Wen
  • Format:Print
  • | Language:English
  • | Pages:87
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Abstract

This paper presents evidence that autocrats use state-owned firms to strategically pacify social unrest via employment provision, a role that may contribute to their favorable treatment and persistence across settings. I use variation in a regional conflict between Uyghur separatists and the Chinese government to establish that, in years and counties with a higher threat of unrest, state-owned firms hire more male minorities, the demographic most likely to participate in ethnic conflict. Concurrently, wages rise and private employment falls among this group. These patterns are consistent with a theoretical framework of government-subsidized, pacification-motivated state employment, and a quantification exercise indicates that state firms implicitly receive a 26% subsidy on male minority wages. I also find that direct transfers to male minorities rise when unrest threat is high, but primarily among the non-employed, revealing a complementary multi-pronged policy response. Furthermore, I find that employment increases after poor trade shocks and natural disasters, consistent with a general role in preventing unrest.

Keywords

State Ownership; Employment; Government and Politics; Conflict Management; China

Citation

Wen, Jaya Y. "State Employment as a Strategy of Autocratic Control in China." Working Paper, January 2023.
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About The Author

Jaya Y. Wen

Business, Government and the International Economy
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  • Lebanon: Splintering Cedar By: Mattias Fibiger, Jaya Y. Wen, Sophus A. Reinert and Gerard Zouein
  • Research: The Costs of Circumventing Tariffs By: Jaya Y. Wen, Ebehi Iyoha, Edmund Malesky and Sung-Ju Wu
  • Fiscal Shortfalls, Financialization, and the Private Sector By: Jaya Y. Wen, Haichao Fan, Guanchun Liu and Huanhuan Wang
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