Differences in Subjective Well-Being between Formal and Informal Workers in Urban China

Abstract

This paper examines the relationship between different types of employment and subjective well-being with a focus on informal employment. The China Labor-force Dynamics Survey (CLDS) for three selected years (2012, 2014 and 2016) shows an upward trend in the subjective well-being of urban workers in the 2010s. However, although the gap in subjective well-being between formal and informal workers narrowed, informal workers’ subjective well-being was still lower than their formal counterparts. Factors affecting the subjective well-being of formal and informal workers and their different effects were revealed to explain this difference. The subjective well-being of informal workers is significantly related to their informal status of employment, economic conditions (such as income and working hours), human capital, social capital (such as perceived social justice and perceived community connectedness) and urban environment. The paper enhances the understanding of people’s subjective well-being by differentiating informal/formal segments of working populations.