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Social Identity and Inequality: The Impact of China's Hukou System

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Author Info

  • Afridi, Farzana

    ()
    (Indian Statistical Institute)

  • Li, Sherry Xin

    ()
    (University of Texas at Dallas)

  • Ren, Yufei

    ()
    (Union College)

Abstract

We conduct an experimental study to investigate the causal impact of social identity on individuals' response to economic incentives. We focus on China's household registration (hukou) system which favors urban residents and discriminates against rural residents in resource allocation. Our results indicate that making individuals' hukou status salient and public significantly reduces the performance of rural migrant students on an incentivized cognitive task by 10 percent, which leads to a significant leftward shift of their earnings distribution. The results demonstrate the impact of institutionally imposed social identity on individuals' intrinsic response to incentives, and consequently on widening income inequality.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6417.

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Length: 41 pages
Date of creation: Mar 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6417

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Keywords: social identity; inequality; field experiment; hukou; China;

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References

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. If you pay peanuts . . . Part Two (self fulfilling prophecy edition): if you treat people badly, you get the worst out of them
    by Nicholas Gruen in Club Troppo on 2012-04-07 07:00:41
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Cited by:
  1. Stuart Cameron & UNICEF Innocenti Research Centre, 2012. "Education, Urban Poverty and Migration: Evidence from Bangladesh and Vietnam," Innocenti Working Papers inwopa679, UNICEF Innocenti Research Centre.
  2. Wenya Cheng & John Morrow & Kitjawat Tacharoen, 2013. "Productivity as if Space Mattered: An Application to Factor Markets Across China," CESifo Working Paper Series 4494, CESifo Group Munich.
  3. Elaine M. Liu & Juanjuan Meng & Joseph Tao-yi Wang, 2013. "Confucianism and Preferences: Evidence from Lab Experiments in Taiwan and China," NBER Working Papers 19615, National Bureau of Economic Research, Inc.
  4. Morita, Hodaka & Servátka, Maroš, 2013. "Group identity and relation-specific investment: An experimental investigation," European Economic Review, Elsevier, vol. 58(C), pages 95-109.
  5. 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.
  6. Weng, Qian, 2013. "Session Size and its Effect on Identity Building: Evidence from a public goods experiment," Working Papers in Economics 560, University of Gothenburg, Department of Economics.
  7. Uwe Dulleck & Jonas Fooken & Yumei He, 2012. "Public Policy and Individual Labor Market Discrimination: An Artefactual Field Experiment in China," QuBE Working Papers 002, QUT Business School.
  8. Hoff, Karla & Pandey, Priyanka, 2012. "Making up people -- the effect of identity on preferences and performance in a modernizing society," Policy Research Working Paper Series 6223, The World Bank.
  9. Hoff, Karla & Pandey, Priyanka, 2014. "Making up people—The effect of identity on performance in a modernizing society," Journal of Development Economics, Elsevier, vol. 106(C), pages 118-131.
  10. Wenya Cheng & John Morrow & Kitjawat Tacharoen, 2012. "Productivity as if space mattered: an application to factor markets across China," LSE Research Online Documents on Economics 48930, London School of Economics and Political Science, LSE Library.

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