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Abstract
Because land is scarce, farmers in China increasingly have to rely on nonfarm
activities to enhance their incomes. The functioning of rural nonfarm labor markets is
therefore crucial in determining who has access to nonfarm employment. Previous studies
have identified human capital as a key factor determining the selection of workers in the
rural nonfarm economy. Using a detailed household survey of northern and northeastern
China, this paper shows that guanxi (social networks), has also played an important role.
With limited nonfarm job opportunities and poor market information, farmers with better
social contacts are more likely to obtain nonfarm jobs. Moreover, guanxi has a larger
effect on the nonfarm employment opportunities of male workers than female workers.