ABSTRACTChina’s migrant workers, the majority of whom are residents of rural China, have poured in to urban centres. Despite this influx, migrant workers have not integrated into urban society; rather, rural migrant life in cities is characterized by residential segregation and widespread social exclusion. This study explores the effect of residential segregation on the employment stability of China’s migrant population and investigates the intergenerational differences in this effect. Data were obtained from China’s 2014 special investigation on the social interactions and mental health of migrant workers and covered 6,805 and 3,237 people from the new generation (born in 1980 or later) and first-generation (born before 1980) migrant populations, respectively. Propensity score matching was employed to match those living in and outside of residentially segregated areas. Residential segregation had a significant adverse effect on the total sample’s employment stability. The negative effect of residential segregation on employment stability among the first-generation migrant population was found to be nonsignificant, but was significant for the new generation of migrants.