Where Did All the Remittances Go? Understanding the Impact of Remittances on Consumption Patterns in Rural China
AbstractWe focus on the impact of migrants’ remittances on consumption patterns in rural China, allowing for endogeneity of remittances and county fixed-effects. We find that the marginal propensity to consume out of remittances is close to unity, which is far greater than that out of non-migrant earnings or farm income. These findings imply that rural households take remittances as permanent income and are consistent with the prevalence of circular and repeat migration which is largely caused by the combination of the restrictive hukou (household registration) system and the rigid land tenure system in China.
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Bibliographic InfoPaper provided by Department of Economics, University of Kent in its series Studies in Economics with number 0907.
Date of creation: May 2009
Date of revision:
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Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP
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Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-06-10 (All new papers)
- NEP-CNA-2009-06-10 (China)
- NEP-DEV-2009-06-10 (Development)
- NEP-MIG-2009-06-10 (Economics of Human Migration)
- NEP-TRA-2009-06-10 (Transition Economics)
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