Social Identity and Inequality: The Impact of China's Hukou System
AbstractWe 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 InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6417.
Length: 41 pages
Date of creation: Mar 2012
Date of revision:
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Other versions of this item:
- Farzana Afridi & Sherry Xin Li & Yufei Ren, 2010. "Social Identity and Inequality: The Impact of China's Hokou System," Working Papers id:3003, eSocialSciences.
- Farzana Afridi & Sherry Xin Li & Yufei Ren, 2010. "Social Identity and Inequality--The Impact of China’s Hukou System," Working papers 190, Centre for Development Economics, Delhi School of Economics.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-03 (All new papers)
- NEP-CBE-2012-04-03 (Cognitive & Behavioural Economics)
- NEP-CNA-2012-04-03 (China)
- NEP-DEV-2012-04-03 (Development)
- NEP-EXP-2012-04-03 (Experimental Economics)
- NEP-PBE-2012-04-03 (Public Economics)
- NEP-TRA-2012-04-03 (Transition Economics)
- NEP-URE-2012-04-03 (Urban & Real Estate Economics)
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- If you pay peanuts . . . Part Two (self fulfilling prophecy edition): if you treat people badly, you get the worst out of them
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