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Sectoral asymmetries and a social-welfare interpretation of Hukou

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  • Gersovitz, Mark

Abstract

The Hukou system's restriction of Chinese internal migration is controversial. This paper models internal migration in a dual economy and assesses the social welfare consequences of the Hukou system. It contrasts the effects of absolute prohibition of migration with the mere exclusion of migrants from certain services such as health care and education. Asymmetries between the rural and urban sectors mean that optimality may require different levels of utility in the two sectors. The existence of a floating population, however, is inconsistent with an optimal labor allocation.

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  • Gersovitz, Mark, 2016. "Sectoral asymmetries and a social-welfare interpretation of Hukou," China Economic Review, Elsevier, vol. 38(C), pages 108-115.
    • Handle: RePEc:eee:chieco:v:38:y:2016:i:c:p:108-115
    DOI: 10.1016/j.chieco.2015.11.003
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    Cited by:

    1. Xiaoyu Wu & Jianmei Zhao, 2020. "Risk sharing, siblings, and household equity investment: evidence from urban China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(2), pages 461-482, April.
    2. Tan, Jing & Xu, Hao & Yu, Jingwen, 2022. "The effect of homeownership on migrant household savings: Evidence from the removal of home purchase restrictions in China," Economic Modelling, Elsevier, vol. 106(C).

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    Keywords

    Hukou; Migration; Restrictions; China;
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