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Remittances and relative concerns in rural China

Author

Listed:
  • Alpaslan Akay

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

  • Olivier Bargain

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École 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, Rheinische Friedrich-Wilhelms-Universität Bonn)

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

  • Alpaslan Akay & Olivier Bargain & Corrado Giulietti & Juan D. Robalino & Klaus F. Zimmermann, 2016. "Remittances and relative concerns in rural China," Post-Print hal-01447860, HAL.
  • 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
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    2. Sihong Xiong & Ya Wu & Shihai Wu & Fang Chen & Jianzhong Yan, 2020. "Determinants of migration decision-making for rural households: a case study in Chongqing, China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 104(2), pages 1623-1639, November.
    3. Zimmermann, Klaus F., 2017. "Migration for Development: From Challenges to Opportunities," GLO Discussion Paper Series 70, Global Labor Organization (GLO).
    4. Artjoms Ivlevs & Milena Nikolova & Carol Graham, 2019. "Emigration, remittances, and the subjective well-being of those staying behind," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(1), pages 113-151, January.
    5. Massimiliano Tani, 2017. "Hukou Changes and Subjective Well-Being in China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(1), pages 47-61, May.
    6. Shu Cai & Albert Park & Winnie Yip, 2022. "Migration and experienced utility of left-behind parents: evidence from rural China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(3), pages 1225-1259, July.
    7. Tani, Massimiliano, 2015. "Hukou Changes and Subjective Well-Being," IZA Discussion Papers 9451, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Positional concerns; Remittances; Subjective well-being;
    All these keywords.

    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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