Social competition and the contingent legitimation of pay differentials in reform-era China

Abstract

Abstract This study extends recent research on the social determinants of the preferences for distributive disparities. We drew on a recent survey of more than 58,000 participants from 335 large cities in mainland China and measured pay differentials with a vignette experiment about allocating bonuses between two secretaries of different performance levels. Our ordinal regression models adjust for city-level random effects and exploit variation in early-age exposure to the incentives for educational competition across 840 admission district-by-cohort sample groups. Our results show that a higher incentive for long-term educational competition is associated with higher levels of legitimate pay differentials among all groups except the highest-status group, thereby narrowing the status gap. A stronger competitive intensity apparently fosters system justification among the majority lower-status groups but ostensibly does not affect legitimation among the top-status group. This heterogeneity in the effect is (a) unconfounded by personal income rank, provincial gross domestic product, local wealth inequality, and opportunity for college enrollment; and (b) robust to alternative measures of incentives for competition, subdivisions of status groups, nonparametric causal inference, and weighting for sample representativeness.