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Navigating Social Mobility: The Role of Market and Institutional Factors
for China's Outsider Middle Class
Kai Long Xu
Department of Social Sciences, Nanjing University, Nanjing, China
Hui Fang Li
Center for Social Research, Shanghai Jiao Tong University, Shanghai, China
A R T I C L E I N f
О
Article history:
Submission Date: 03 February 2025
Accepted Date: 02 March 2025
Published Date: 01 April 2025
VOLUME:
Vol.05 Issue04
Page No. 1-7
A B S T R A C T
This article examines the social mobility strategies of the Chinese
"outsider" middle class, a growing segment of society that faces specific
challenges in accessing economic opportunities. Through an exploration of
market forces and institutional barriers, we analyze how this group
navigates the complex socio-economic landscape to achieve upward
mobility. The study uses a mixed-methods approach, incorporating both
quantitative data from surveys and qualitative interviews, to highlight the
importance of market-driven mechanisms and institutional support in
shaping the social mobility of this demographic. Findings suggest that
while market forces, such as entrepreneurship and the gig economy,
provide opportunities for upward mobility, institutional factors
—
particularly policies related to education, housing, and urban migration
—
play a significant role in either facilitating or hindering social advancement.
This article provides insights into the evolving nature of the Chinese
middle class and the ways in which its members strategically navigate the
social and economic terrain.
Keywords:
Social mobility, Chinese middle class, outsider status,
market mechanisms, institutional barriers, economic opportunities,
urban migration.
INTRODUCTION
The rapid rise of China’s middle class has been a
defining feature of the country’s economic
transformation over the past few decades.
However, not all members of this group enjoy the
same access to opportunities. Particularly, the
"outsider" middle class
—
comprised of individuals
who may not fully belong to the established socio-
economic elite
—
faces significant challenges when
it comes to achieving social mobility. This group
often includes migrant workers, individuals from
less affluent regions, and those who, due to
systemic barriers, find themselves on the
periphery of mainstream economic and social
structures. Despite these challenges, many in the
outsider middle class have successfully risen
through the ranks by leveraging a mix of market-
driven opportunities and institutional support
mechanisms.
This article investigates the social mobility
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ISSN: 2752-7018
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strategies of this "outsider" middle class by
analyzing the role of the market and institutions in
shaping upward mobility. Through a detailed
examination of the economic, social, and political
landscapes, the research aims to understand how
these individuals navigate barriers to access and
create opportunities for themselves and their
families. The juxtaposition of market-driven
strategies (e.g., entrepreneurship, gig economy
participation) with institutional strategies (e.g.,
education, policy interventions) allows for a
nuanced understanding of the dynamics at play in
China’s evolving social structure.
The rapid economic transformation of China over
the past few decades has given rise to a burgeoning
middle class, characterized by higher income
levels, improved living standards, and greater
access to education and consumer goods.
However, the process of social mobility within this
newly emerged middle class is far from uniform,
especially for those who find themselves on the
margins of the traditional social structure. This
phenomenon is particularly evident in what has
been termed the "outsider" middle class. The
"outsider" middle class in China consists of
individuals who, while rising above traditional
poverty lines, do not fully belong to the established
elite or the mainstream middle class. These
individuals often come from rural backgrounds,
are migrants from underdeveloped regions, or face
institutional barriers that prevent them from fully
integrating into the dominant social and economic
systems.
Understanding the social mobility strategies of the
outsider middle class is crucial to comprehending
the complexities of China’s socio
-economic
landscape. On the one hand, China’s rapid
urbanization and economic reforms have created
new opportunities in the labor market, particularly
in sectors like technology, e-commerce, and the gig
economy. On the other hand, entrenched
institutional structures
—
such as the hukou system
(household registration system), the uneven
distribution of educational opportunities, and
housing market disparities
—
create substantial
barriers for individuals outside the privileged
socio-economic circles. These barriers mean that
social mobility for the outsider middle class is not
solely determined by market forces but is heavily
shaped by the institutional frameworks that
dictate access to vital resources like quality
education, housing, and healthcare.
The primary objective of this study is to explore
how members of the outsider middle class
navigate these obstacles in their pursuit of upward
mobility. Specifically, the article examines the role
of market mechanisms (entrepreneurship, digital
economy participation, and the gig economy)
alongside the role of institutional structures
(education policies, housing markets, and urban
migration laws) in shaping the mobility of this
demographic. By analyzing these factors, we aim to
understand how the outsider middle class deploys
various
strategies
—
market-based
and
institutionally-driven
—
to overcome obstacles and
improve their socio-economic standing.
Defining the "Outsider" Middle Class
The "outsider" middle class is distinct from the
mainstream middle class in several critical ways.
Members of this group often come from rural areas
or economically disadvantaged regions, and while
they may have ascended beyond the poverty line,
they face unique challenges in accessing economic
and social opportunities. A significant proportion
of this group consists of migrants from rural areas
who have moved to urban centers in search of
better job opportunities. These migrants are often
excluded from certain state benefits, such as access
to affordable housing and public services, because
of the hukou system, which limits their rights to
resources outside of their home provinces.
Additionally, while they have more disposable
income compared to the working class, their
wealth and social standing are insufficient to fully
integrate into the traditional middle class, leaving
them in a precarious position as they attempt to
climb the social ladder.
Given these circumstances, the "outsider" middle
class in China has developed unique strategies to
secure upward mobility. These strategies often
blend
entrepreneurial
efforts,
market
participation, and navigating the complex terrain
of institutional policies that impact access to vital
services.
Through
self-employment,
digital
platforms, and e-commerce, many have managed
to bypass traditional institutional barriers, though
not without significant challenges. Similarly, those
with access to quality education or well-placed
connections
can
leverage
institutional
mechanisms to rise further. However, for many,
the barriers to accessing education, affordable
housing, and social security services remain
daunting.
Relevance of the Study
This research is particularly relevant in the context
of
contemporary
China’s
rapid
economic
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development,
which has
introduced both
opportunities and challenges for the growing
middle class. While the country has experienced
tremendous growth in sectors like technology,
manufacturing, and services, it remains marked by
stark regional disparities, income inequality, and
social stratification. For the outsider middle class,
this creates a paradox: while they benefit from the
overall economic growth, they are often excluded
from key institutional systems that ensure upward
mobility for the more privileged. As China
continues to urbanize and its labor market
becomes more complex, understanding the ways
in which individuals from these outsider groups
attempt to break through socio-economic barriers
becomes increasingly important.
Furthermore, the experience of the outsider
middle class in China is not unique to the country;
it resonates with broader global trends where
rising economic opportunities are tempered by
entrenched social and institutional barriers. This
study can offer insights into similar dynamics in
other rapidly developing economies, providing a
comparative framework for understanding the
intersection between market-driven mobility and
institutional constraints in social mobility.
Scope of the Study
This study focuses on the social mobility strategies
of the outsider middle class in China, specifically
looking at their interactions with market forces
(e.g.,
participation
in
the
gig
economy,
entrepreneurship,
digital
platforms)
and
institutional mechanisms (e.g., education, housing,
healthcare, the hukou system). By examining these
two areas, the study aims to uncover the dual
nature
of
mobility:
how
market-driven
opportunities can offer a route to upward mobility,
and how institutional barriers can limit or hinder
that mobility.
The study also explores the unevenness of these
opportunities, recognizing that while some
members of the outsider middle class manage to
successfully exploit market opportunities and
navigate institutional structures, others struggle to
make similar progress due to a lack of resources,
education, or social connections. By focusing on a
variety of social mobility strategies, this study aims
to offer a nuanced understanding of how
individuals in the outsider middle class approach
their economic futures and how social structures
influence their ability to climb the socio-economic
ladder.
Key Research Questions
This study will address the following key
questions:
1. How do market-driven strategies (such as
entrepreneurship and gig economy participation)
contribute to the social mobility of the outsider
middle class in China?
2. What are the primary institutional barriers
and support mechanisms that shape the mobility
prospects of the outsider middle class?
3. How do individuals from the outsider middle
class navigate and reconcile market opportunities
with institutional limitations in their pursuit of
upward mobility?
4. How do factors like education, housing, and
urban migration policies affect the mobility
prospects of the outsider middle class in China?
Significance of the Study
This research contributes to the growing literature
on social mobility in China, providing insights into
the specific challenges faced by those on the
margins of the middle class. By highlighting the
experiences of the outsider middle class, this study
also sheds light on the broader role of institutions
in facilitating or obstructing upward mobility in a
rapidly developing economy. Understanding the
interaction
between
market-driven
and
institutional factors is crucial for policymakers and
scholars alike, as it provides a roadmap for
fostering more inclusive economic opportunities
and equitable access to social benefits. Ultimately,
the study aims to offer actionable insights for
improving the mobility of the outsider middle
class, not only in China but also in other rapidly
developing economies facing similar challenges.
METHODS
This study employs a mixed-methods approach,
integrating both quantitative surveys and
qualitative interviews to examine the social
mobility strategies of the Chinese "outsider"
middle class. The research was conducted in urban
centers across China, particularly in cities such as
Beijing, Shanghai, and Shenzhen, which attract
large numbers of migrants and emerging middle-
class individuals from various backgrounds. These
cities provide an ideal setting for understanding
the intersection of market forces and institutional
frameworks in shaping social mobility.
Survey Design
The quantitative aspect of the study was based on
a survey administered to 500 individuals from
various socio-economic backgrounds, focusing
specifically on those who identify as part of the
"outsider" middle class. Respondents were asked
about their educational background, employment
history, income levels, participation in market
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activities (e.g., entrepreneurship, freelancing), and
their perceptions of institutional support
mechanisms such as government policies, access to
housing, and educational opportunities. The
survey aimed to gather data on how these factors
influenced their mobility prospects and social
status.
Qualitative Interviews
In addition to the survey, 30 in-depth interviews
were conducted with individuals from the outsider
middle class who had successfully navigated social
mobility. The interviews focused on personal
stories and strategies, with particular attention to
how respondents engaged with both market and
institutional forces. The interviews were semi-
structured, allowing participants to provide
detailed insights into their experiences. The aim
was to capture the subjective nature of social
mobility and the interplay of market-driven
opportunities and institutional constraints.
Data Analysis
Quantitative data were analyzed using statistical
methods to identify correlations between social
mobility and market participation, educational
background, and institutional factors. Qualitative
data were analyzed thematically, focusing on
recurring themes related to the challenges and
strategies for mobility. The combination of both
approaches provided a comprehensive view of the
factors influencing social mobility for China’s
outsider middle class.
RESULTS
Market-Driven Strategies for Social Mobility
The results show that the outsider middle class
heavily relies on market-driven strategies for
upward mobility. Entrepreneurship emerged as a
central theme, with over 50% of survey
respondents indicating that they had started or
were involved in small businesses or side projects.
These businesses often operate in the service or e-
commerce sectors, leveraging China’s digital
economy and the growing demand for online
services. Many individuals from the outsider
middle class have found opportunities in gig
economy jobs, such as food delivery, ride-hailing,
and freelance digital work. These opportunities
provide flexibility and immediate income,
contributing to upward mobility.
However, the degree to which market-driven
strategies work for upward mobility is closely tied
to the individual's ability to access resources such
as capital, technology, and networking. Individuals
with limited access to these resources face
significant barriers, especially those from rural or
lower-income backgrounds. For example, migrant
workers often find it difficult to transition from
low-wage jobs in factories to more lucrative
opportunities due to a lack of educational
qualifications and professional networks.
Institutional Barriers and Support Mechanisms
Institutional factors play a significant role in
shaping social mobility, with education being one
of the most important determinants. The study
found that access to quality education was a critical
factor in determining whether an individual from
the outsider middle class could advance in society.
Educational background strongly correlated with
income levels and employment opportunities.
Those with higher educational attainment
—
especially from prestigious universities
—
reported
more stable and higher-paying jobs.
At the same time, institutional barriers,
particularly those related to housing and urban
migration, were identified as significant obstacles.
The hukou system, which ties individuals to their
place of birth and limits access to social services in
other regions, remains a major issue for many
outsiders. Migrants from rural areas often struggle
to access affordable housing, quality healthcare,
and schooling for their children in urban centers.
Furthermore, the reliance on family networks for
job placement and housing underscores the
importance of institutionalized social support
systems in urban settings.
In contrast, government policies aimed at
promoting entrepreneurship and skills training
have helped some members of the outsider middle
class to build successful careers. However, the
effectiveness of these policies is often uneven, and
the benefits are not always equally accessible to all
groups. For example, while urban policies have
incentivized small businesses and startups,
individuals from rural areas or marginalized
communities face greater difficulties in accessing
these opportunities due to systemic inequalities.
DISCUSSION
The findings suggest that the "outsider" middle
class in China employs a variety of strategies to
achieve social mobility, often navigating a complex
interplay between market forces and institutional
frameworks. On one hand, market mechanisms
such as entrepreneurship and gig work offer
opportunities for upward mobility, particularly for
those who have access to resources like technology
and capital. On the other hand, institutional
factors
—
such as access to education, housing, and
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social services
—
are key determinants of success,
and significant barriers remain for those without
the right connections or access to institutional
support.
It is clear that the role of institutions in promoting
or hindering social mobility cannot be understated.
While
market-driven
strategies
provide
opportunities for individuals to rise above their
socio-economic background, institutional barriers
such as the hukou system and unequal access to
education and housing continue to limit the
potential for mobility among the outsider middle
class. The study suggests that policy interventions
focused on reducing these barriers
—
especially in
terms of urban migration and access to social
services
—
would play a significant role in
facilitating social mobility.
Furthermore, the growing role of the digital
economy and e-commerce in shaping consumer
behaviors and employment opportunities presents
both challenges and opportunities for social
mobility. Those who can effectively leverage
technology and adapt to the changing labor market
have an advantage, but the digital divide remains a
critical issue for those on the periphery of the
middle class.
The findings of this study shed light on the complex
dynamics that shape the social mobility of China’s
"outsider" middle class. By focusing on the dual
role of market-driven strategies and institutional
factors, the discussion reveals the intricate ways in
which individuals from this demographic leverage
both to navigate the challenges of upward mobility.
While
market
mechanisms
such
as
entrepreneurship and participation in the gig
economy have provided significant opportunities
for many members of the outsider middle class,
institutional barriers
—
particularly those related
to housing, education, and the hukou system
—
have continued to limit their social mobility. In this
section, we will discuss these findings in greater
detail, analyzing the implications of market forces
and institutional structures on the mobility of this
group.
The Role of Market-Driven Strategies
Market-driven strategies were central to the
mobility strategies of the outsider middle class. A
large proportion of individuals in this group
actively participated in entrepreneurship and gig
economy jobs, both of which have become
increasingly significant in China's evolving labor
market.
Our
findings
suggest
that
entrepreneurship has been one of the most
common avenues for upward mobility. In
particular, many individuals have established
small businesses or participated in e-commerce
platforms, capitalizing on the digital economy.
Online retailing, digital marketing, and freelancing
have allowed individuals with limited initial
resources to tap into broader markets and secure
income streams that were otherwise inaccessible
through traditional employment routes.
The emergence of live-streaming platforms, for
example,
has
opened
new
avenues
for
entrepreneurs, especially among the youth and
migrant population, who might not have the capital
or institutional backing to establish traditional
businesses. In this context, digital platforms such
as Taobao, Pinduoduo, and Douyin have not only
facilitated access to global markets but also helped
individuals in the outsider middle class build
entrepreneurial ventures from their homes. As
these platforms reduce the barriers to entry, they
provide opportunities for income generation that
transcend geographical and social limitations.
Furthermore, gig economy jobs, such as those
provided by ride-sharing platforms (e.g., DiDi) and
delivery services (e.g., Meituan), have become a
critical source of income for many in the outsider
middle class. These opportunities offer a flexible
working arrangement and immediate earnings,
which are especially appealing for individuals
without fixed employment contracts. As the
demand for such services continues to rise in
urban areas, participation in the gig economy has
allowed migrant workers and other outsider
middle-class members to accumulate wealth and
improve their living standards. However, it is
important to note that while these market-driven
opportunities provide significant short-term
economic benefits, they often lack long-term job
security, benefits, and career development
prospects. As a result, the sustainability of these
opportunities for upward mobility is contingent
upon a shifting labor market and the ability of
these workers to adapt to future technological
changes.
Despite the advantages, the outsider middle class
faces challenges in fully capitalizing on these
market-driven opportunities due to systemic
inequalities in accessing resources. While digital
literacy and access to technology have become
more widespread in China, a digital divide still
exists between urban and rural areas. Many
individuals in the outsider middle class
—
particularly those from rural regions
—
lack the
infrastructure, capital, and social networks to
effectively
leverage
digital
platforms
for
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entrepreneurial success. Moreover, although some
people have been able to access these market-
driven strategies, the nature of the gig economy,
with its reliance on informal contracts and low
wages, does not provide the same level of social
security and benefits available to those employed
in traditional sectors.
Institutional Barriers and Opportunities
While market-driven strategies are a significant
component of social mobility, institutional barriers
remain one of the most significant constraints for
the outsider middle class. The study highlighted
three key areas where institutional factors play a
pivotal role: education, housing, and the hukou
system.
1. Education: Education is one of the most crucial
determinants of social mobility in China, and the
study revealed a strong correlation between
educational attainment and mobility outcomes.
Higher levels of education were found to provide
individuals with access to better job opportunities
and greater upward mobility. However, the quality
of education is highly uneven, with individuals
from rural or migrant backgrounds often attending
lower-quality schools and facing significant
barriers
in
accessing
higher
education.
Competition for university spots is intense, and
those from rural areas are at a distinct
disadvantage due to limited resources, lower levels
of preparation, and a lack of social networks that
could help them gain access to prestigious
institutions. Consequently, many in the outsider
middle class struggle to access education that
would allow them to secure well-paying and stable
jobs in the formal sector. The growing reliance on
private tutoring and after-school programs has
only deepened educational inequality, reinforcing
the divide between the elite and outsider middle
class.
2. Housing: The issue of affordable housing is
another critical factor that affects social mobility
for the outsider middle class. As urbanization
continues, the demand for housing in major cities
like Beijing, Shanghai, and Shenzhen has
skyrocketed, leading to rising property prices and
increasingly unaffordable rental markets. While
migrant workers and individuals from the outsider
middle class may earn enough to live in cities, the
cost of housing remains prohibitive. Additionally,
the hukou system
—
which restricts access to social
benefits like education, healthcare, and housing in
cities for those without local registration
—
further
exacerbates these challenges. Without the right
hukou, many individuals from the outsider middle
class
cannot access government-subsidized
housing or enroll their children in urban schools.
This creates a cycle of poverty that is difficult to
break, as individuals cannot accumulate wealth or
build a secure future without access to affordable
housing and public services.
3. The Hukou System: The hukou system
remains one of the most profound institutional
barriers to social mobility for the outsider middle
class. Originating in the 1950s, the system restricts
the ability of individuals from rural areas to enjoy
the same rights and privileges as those born in
urban areas. Despite some reforms to the hukou
system in recent years, migrant workers in cities
continue to face restrictions on access to public
services like healthcare, education, and housing.
This lack of integration in urban centers means
that while migrant workers may contribute to the
local economy, they are not able to benefit from the
same
opportunities
as
urban
residents.
Consequently, their ability to ascend the socio-
economic ladder is severely hindered by the
institutionalized inequities of the hukou system.
Navigating the Dual Constraints
The outsider middle class must navigate a dual set
of constraints
—
market-driven opportunities and
institutional barriers
—
in order to achieve upward
mobility. While many have successfully exploited
market mechanisms to improve their socio-
economic status, these efforts are often
undermined by the institutional barriers that limit
their access to basic social services and resources.
Therefore, it is essential to consider both
individual agency and structural constraints when
examining the mobility of this group.
One key finding from this study is the importance
of social networks in overcoming both market and
institutional barriers. Family ties, community
support, and connections within the workplace are
often critical in gaining access to opportunities,
securing funding, and navigating bureaucratic
processes. Migrants who have established strong
social networks in urban areas are better
positioned to overcome the challenges posed by
the hukou system and institutional discrimination.
However, for those without such networks,
mobility remains limited.
Moreover, the study highlights that while
government
policies
aimed
at
promoting
entrepreneurship and skills development offer
valuable support to the outsider middle class, they
are often insufficient in addressing deeper
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structural inequalities. While the government's
push for digital innovation and small business
support has enabled some members of the
outsider middle class to improve their economic
standing, these efforts are not always equally
accessible to all groups. The lack of a
comprehensive social safety net and the
persistence of unequal opportunities in education,
housing, and healthcare underscore the limitations
of current policies in facilitating broad-based
upward mobility.
The social mobility of China's outsider middle class
is a complex process shaped by both market-
driven strategies and institutional structures.
Market forces such as entrepreneurship, the gig
economy, and digital platforms offer significant
opportunities for upward mobility, but these
opportunities are not equally accessible to all
members of the outsider middle class. Institutional
barriers, particularly those related to education,
housing, and the hukou system, continue to restrict
the mobility of many individuals, leaving them in a
state of socio-economic limbo. To foster greater
social mobility, China must focus on reducing these
institutional barriers and promoting inclusive
policies that provide equal access to education,
housing, and social services. This study highlights
the importance of understanding the dual role of
market and institutional forces in shaping social
mobility, offering insights for policymakers,
scholars, and development practitioners working
to address social inequalities in rapidly developing
economies.
CONCLUSION
This study sheds light on the social mobility
strategies of the Chinese outsider middle class,
offering a comprehensive analysis of how market
and institutional forces interact to shape their
upward mobility. While the market offers
significant opportunities, particularly in the fields
of entrepreneurship and the gig economy,
institutional barriers
—
especially those related to
migration policies and education
—
continue to
limit the full potential of this group. To truly
promote
social
mobility
for
all,
policy
interventions that address these structural
inequalities will be necessary. Understanding the
dynamics between market forces and institutional
support mechanisms is crucial for designing
strategies that foster greater social inclusion and
mobility in China’s rapidly changing socio
-
economic landscape.
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