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Hukou and Consumption Heterogeneity: Migrants' Expenditure Is Depressed by Institutional Constraints in Urban China

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  • Binkai Chen
  • Ming Lu
  • Ninghua Zhong

Abstract

This paper provides a new explanation for China's extremely low consumption-to-GDP ratio, highlighting the constraints of the "household registration system" (Hukou) on China's household consumption. Our baseline results show that the consumption of migrants without an urban Hukou is 30.7% lower than that of urban residents. Moreover, consumption heterogeneity cannot be explained by migration effects, culture, social norms, habits or some other forms of household heterogeneity. Further studies on the composition of household consumption have shown that the gaps are largest in areas such as education and culture, durable goods and health. As both the number and income level of migrants are rising, the constraining effects of Hukou on household consumption will continue to increase.

Suggested Citation

  • Binkai Chen & Ming Lu & Ninghua Zhong, 2012. "Hukou and Consumption Heterogeneity: Migrants' Expenditure Is Depressed by Institutional Constraints in Urban China," Global COE Hi-Stat Discussion Paper Series gd11-221, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hst:ghsdps:gd11-221
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    4. Massimiliano Tani, 2017. "Hukou Changes and Subjective Well-Being in China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(1), pages 47-61, May.
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    12. Tani, Massimiliano, 2015. "Hukou Changes and Subjective Well-Being," IZA Discussion Papers 9451, Institute of Labor Economics (IZA).
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    18. Nguyen, Giang, 2018. "Consumption behavior of migrant households in Vietnam: Remittances, duration of stay, and the household registration system," Journal of Asian Economics, Elsevier, vol. 57(C), pages 1-12.
    19. Ge, Suqin & Yang, Dennis Tao & Zhang, Junsen, 2018. "Population policies, demographic structural changes, and the Chinese household saving puzzle," European Economic Review, Elsevier, vol. 101(C), pages 181-209.
    20. Ivan Korčok, 2012. "Zmluva o stabilite, koordinácii a správe v hospodárskej a menovej únii. Politické a ekonomické aspekty," Medzinarodne vztahy (Journal of International Relations), Ekonomická univerzita, Fakulta medzinárodných vzťahov, vol. 10(1), pages 206-211.
    21. Eduard Gombár, 2012. "Recenzia - Karol Sorby - Jún 1967. Šesť dní, ktoré zmenili Blízky východ," Medzinarodne vztahy (Journal of International Relations), Ekonomická univerzita, Fakulta medzinárodných vzťahov, vol. 10(1), pages 212-213.
    22. Eric Fong & Hang Yue Ngo, 2016. "Unemployment patterns of local-born and immigrant youth in Hong Kong," Journal of Population Research, Springer, vol. 33(3), pages 243-261, September.
    23. Christian Dreger & Tongsan Wang & Yanqun Zhang, 2015. "Understanding Chinese Consumption: The Impact of Hukou," Development and Change, International Institute of Social Studies, vol. 46(6), pages 1331-1344, November.

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    More about this item

    Keywords

    Consumption; Heterogeneity; Hukou System; Migrants; Urban Residents;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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