The rise of a market economy in urban China was first and foremost manifested with the expansion of self-employment. Yet, pathways and returns to self-employment were conditioned by the changing opportunity structures, the retreat of socialist gender ideology, and the dominance of patriarchal norms in capitalist entrepreneurship. Using data from the Life History and Social Change survey in 1996, the China Health and Nutrition Surveys in 1997, 2000 and 2004, and the China Household Income Project survey in 2002, I investigate the career patterns and earnings of self-employed men and women in urban China to evaluate the impact of institutional transformation on the opportunities of different social groups.;In terms of the transition into self-employment, I find that previous labor market position is decisive. Initially self-employment was most attractive to those with a disadvantaged status in urban labor market, such as the unemployed and rural migrants. After the acceleration of privatization in the mid-1990s, however, those with scarce managerial talent also were drawn to self-employment. Nevertheless, newly self-employed women were still more likely than men to come from disadvantaged backgrounds and the managerial men who became self-employed developed businesses with non-family employees rather than entering solo self-employment. As work decisions returned to the household, women's employment became more constrained by household needs and family played a particularly important role for women's entry into self-employment. In terms of variation in earnings, I find that while in 1996 self-employed men and women earned no more than wage workers, by 2002 self-employment was associated with higher earnings for rural migrants but with lower earnings for urban resident women. Finally, using in-depth interviews with 32 private entrepreneurs in 2007, I examine the specific processes that lead some people into self-employment rather than wage work and demonstrate the influence of a patriarchal ideology on the experience of self-employed women.
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