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Happiness in the dual society of urban China:Hukou identity, horizontal inequality and heterogeneous reference

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  • Shiqing Jiang
  • Ming Lu
  • Hiroshi Sato

Abstract

This paper studies the impact of income inequality on the subjective well-being of different social groups in urban China. We classify urban social groups according to their hukou status: rural migrants, "born?urban residents, and "acquired?urban residents who once changed their hukou identity from rural to urban. We focus on how the horizontal inequality-income disparity between migrants and urban residents-affects individual happiness. The main results are as follows. First, migrants suffer from unhappiness when the horizontal inequality increases, but urban residents show a much smaller aversion to the horizontal inequality. Second, migrants will not be happier if their relative incomes within their migrant group increase, while urban residents do become happier when their incomes increase within their group's income distribution. Third, "acquired?urban residents have traits of both migrants and "born?urban residents. They have an aversion to the horizontal inequality like migrants, and they also favor higher relative income among urban residents. Fourth, "born?urban residents have lower happiness scores when they are old. People who are Communist Party members strongly dislike the horizontal inequality. Our findings suggest that migrants, "acquired?urban residents, elderly people and Party members from "born?urban residents are the potential proponents of social integration policies in urban China.

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Bibliographic Info

Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 22308.

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Date of creation: 2008
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Handle: RePEc:lic:licosd:22308

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Keywords: Horizontal inequality; Happiness; Hukou identity; Migration; Social integration;

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  1. Alberto Alesina & Rafael Di Tella & Robert MacCulloch, 2001. "Inequality and Happiness: Are Europeans and Americans Different?," Harvard Institute of Economic Research Working Papers 1938, Harvard - Institute of Economic Research.
  2. Liu, Zhiqiang, 2005. "Institution and inequality: the hukou system in China," Journal of Comparative Economics, Elsevier, vol. 33(1), pages 133-157, March.
  3. Appleton, Simon & Song, Lina & Xia, Qingjie, 2005. "Has China crossed the river? The evolution of wage structure in urban China during reform and retrenchment," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 644-663, December.
  4. KNIGHT, John & SONG, Lina & GUNATILAKA, Ramani, 2009. "Subjective well-being and its determinants in rural China," China Economic Review, Elsevier, vol. 20(4), pages 635-649, December.
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Cited by:
  1. Becchetti, Leonardo & Massari, Riccardo & Naticchioni, Paolo, 2013. "The Drivers of Happiness Inequality: Suggestions for Promoting Social Cohesion," IZA Discussion Papers 7153, Institute for the Study of Labor (IZA).
  2. Ming Lu & Hong Gao, 2010. "When Globalization Meets Urbanization: Labor Market Reform, Income Inequality, and Economic Growth in the People’s Republic of China," Working Papers id:3095, eSocialSciences.
  3. Hau Chyi & Shangyi Mao, 2012. "The Determinants of Happiness of China’s Elderly Population," Journal of Happiness Studies, Springer, vol. 13(1), pages 167-185, March.
  4. Leonardo Becchetti & Alessandra Pelloni, 2010. "What are we learning from the life satisfaction literature?," Econometica Working Papers wp20, Econometica.

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