Stratification of the Elite: How Hukou Status Divides Advantaged Migrants in China

Abstract

China’s hukou (household registration) system conditions access to the urban labor market on place of registration. Prior research establishes that rural-to-urban hukou conversion is positively selected and that the conversion premium is largest among migrants with the highest probability of converting, but the mechanism behind this pattern remains unspecified. Drawing on complementary capital theory, I argue that hukou functions as institutional clearance whose occupational value is contingent on the human and political capital its holder brings to the labor market. Using China Family Panel Studies data (2016–2022), I apply inverse probability weighting and propensity score stratification to decompose the institutional premium across the propensity distribution. The occupational gap between permanent and temporary migrants is negligible among low-propensity migrants but substantial and persistent among high-propensity migrants and is larger in coastal labor markets where complementary capital is most heavily rewarded. These findings demonstrate that the hukou system fractures advantaged migrants into an institutionally privileged in-group and a structurally excluded out-group, functioning as a mechanism of elite stratification.