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Remittances and relative concerns in rural China

Listed author(s):
  • Alpaslan Akay

    (University of Gothenburg - University of Göteborg, IZA - Institute for the Study of Labor)

  • Olivier Bargain

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille 2 - Université Paul Cézanne - Aix-Marseille 3 - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Corrado Giulietti
  • Juan D. Robalino
  • Klaus F. Zimmermann

    (IZA - Institute for the Study of Labor, University of Bonn - University of Bonn)

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.

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Paper provided by HAL in its series Post-Print with number hal-01447860.

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Date of creation: Feb 2016
Publication status: Published in China Economic Review, Elsevier, 2016, Special Issue on Human Capital, Labor Markets, and Migration, 37, pp.191--207. <10.1016/j.chieco.2015.12.006>
Handle: RePEc:hal:journl:hal-01447860
DOI: 10.1016/j.chieco.2015.12.006
Note: View the original document on HAL open archive server: https://hal-amu.archives-ouvertes.fr/hal-01447860
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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