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Remittances and relative concerns in rural China

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  • Akay, Alpaslan
  • Bargain, Olivier B.
  • Giulietti, Corrado
  • Robalino, Juan D.
  • Zimmermann, Klaus F.

Abstract

The paper investigates the impact of remittances on the relative concerns of households in rural China. Using the Rural to Urban Migration in China (RUMiC) dataset we estimate a series of subjective well-being functions to simultaneously explore relative concerns with respect to income and remittances. Our results show that although rural households experience substantial welfare loss due to income comparisons, they gain well-being by comparing their remittances with those received by their reference group. In other words, we find evidence of a “status effect” with respect to income and of a “signal effect” of similar magnitude with respect to remittances. This finding is robust to various specifications, alternative reference group definitions, controls for the endogeneity of remittances and selective migration, as well as the use of migrants' net contribution to household income.

Suggested Citation

  • Akay, Alpaslan & Bargain, Olivier B. & Giulietti, Corrado & Robalino, Juan D. & Zimmermann, Klaus F., 2016. "Remittances and relative concerns in rural China," China Economic Review, Elsevier, vol. 37(C), pages 191-207.
  • Handle: RePEc:eee:chieco:v:37:y:2016:i:c:p:191-207
    DOI: 10.1016/j.chieco.2015.12.006
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    Cited by:

    1. Artjoms Ivlevs & Milena Nikolova & Carol Graham, 2018. "Emigration, remittances and the subjective well-being of those staying behind," Working Papers 2018-024, Human Capital and Economic Opportunity Working Group.
    2. Tani, Massimiliano, 2015. "Hukou Changes and Subjective Well-Being," IZA Discussion Papers 9451, Institute for the Study of Labor (IZA).
    3. He Zhu & Tsunehiro OTSUKI, 2018. "Can Two Consecutive Generations’ Data Predict Longterm Intergenerational Transition? Evidence from China with three generations," OSIPP Discussion Paper 18E004, Osaka School of International Public Policy, Osaka University.
    4. repec:spr:soinre:v:132:y:2017:i:1:d:10.1007_s11205-016-1247-z is not listed on IDEAS
    5. Zimmermann, Klaus F., 2017. "Migration for Development: From Challenges to Opportunities," GLO Discussion Paper Series 70, Global Labor Organization (GLO).

    More about this item

    Keywords

    Positional concerns; Remittances; Subjective well-being;

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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