The Variable Disadvantage of Nonstandard Employment for Entering Homeownership in Russia and Urban China: The Potential Role of Mortgage Prevalence

Abstract

Abstract Nonstandard employment (NSE) is a disadvantage for entry into homeownership because it is associated with both lower average income and greater uncertainty of future income. These features of NSE make formal mortgage loans from banks riskier to take on and harder to obtain. This mechanism implies that the relative disadvantage of NSE for homeownership entry is greater in societies where, due to institutional and macro-economic factors, mortgages are a more prevalent means to acquire homes. We test these theoretical expectations by analyzing entry to homeownership using panel surveys from Russia and urban China, two former state socialist countries with comparable labor market regulations, housing regimes, and welfare protections, but different mortgage prevalence. NSE is associated with lowers rates of entering homeownership in urban China, where mortgages are far more common, but not in Russia. Moreover, this negative effect in urban China pertains only to home acquisitions via mortgages, not to homeownership entry via other paths. Our findings broaden sociological understanding of how NSE contributes to inequality by highlighting the role of income uncertainty. They also suggest that cross-national differences in financial institutions may moderate the disadvantages of NSE and thus shape the consequences of market transition for stratification.