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Migration constraints and development: Hukou and capital accumulation in China

Author

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  • Thomas Vendryes

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, ENS Cachan - École normale supérieure - Cachan, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

Rural-urban migration flows are a crucial corollary of economic development. The adverse or beneficial effects of internal migration, for sending as well as receiving areas, and the definition of optimal migration policies, have remained much discussed issues since the seminal works of Harris and Todaro (1970). This debate is especially acute in China where the "household registration system" (hukou) acts as a strong constraint on individual migration. This paper aims to assess the consequences of hukou through a simple model of a developing dual economy with overlapping generations. Contrary to existing studies focused on the contemporaneous allocation of economic resources, it deals with the dynamic consequences of migration flows and migration policies. It shows that, in fairly general circumstances, hukou-related migration constraints can actually hasten development, understood as the transfer of the labor force to the modern sector, driven by capital accumulation. The hukou system could thus be one of the causes of the extremely high Chinese saving rate and of the high pace of Chinese development. Insights from the model are confronted with stylized facts from the Chinese development, and theoretical results are especially consistent with the effects of the 2001 "towns and small cities" reform.

Suggested Citation

  • Thomas Vendryes, 2011. "Migration constraints and development: Hukou and capital accumulation in China," PSE-Ecole d'économie de Paris (Postprint) hal-00783794, HAL.
    • Handle: RePEc:hal:pseptp:hal-00783794
    DOI: 10.1016/j.chieco.2011.08.006
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    Citations

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    Cited by:

    1. Yang Yang, 2023. "Hukou Identity and Economic Behaviours: A Social Identity Perspective," Erudite Ph.D Dissertations, Erudite, number ph23-02 edited by Catherine Bros & Julie Lochard, December.
    2. Wang, Chunchao & Zhang, Chenglei & Ni, Jinlan, 2015. "Social network, intra-network education spillover effect and rural–urban migrants' wages: Evidence from China," China Economic Review, Elsevier, vol. 35(C), pages 156-168.
    3. Xiangyu Dong & Mengge Du & Shichen Zhao, 2025. "Drivers of Population Dynamics in High-Altitude Counties of Sichuan Province, China," Sustainability, MDPI, vol. 17(15), pages 1-25, August.
    4. Huasheng Zhu & Junwei Feng & Maojun Wang & Fan Xu, 2017. "Sustaining Regional Advantages in Manufacturing: Skill Accumulation of Rural–Urban Migrant Workers in the Coastal Area of China," Sustainability, MDPI, vol. 9(1), pages 1-23, January.
    5. Thomas Vendryes & Jiaqi Zhan, 2023. "Hukou-Based Discrimination, Dialects and City Characteristics," Working Papers hal-04247417, HAL.
    6. Sun, Nan & Yang, Fan, 2021. "Impacts of internal migration experience on health among middle-aged and older adults—Evidence from China," Social Science & Medicine, Elsevier, vol. 284(C).
    7. Qi, Di & Wu, Yichao, 2016. "The extent and risk factors of child poverty in urban China — What can be done for realising the Chinese government goal of eradicating poverty before 2020," Children and Youth Services Review, Elsevier, vol. 63(C), pages 74-82.
    8. Haojing Shen & Yan Song & Changchun Feng & Zhengying Shan, 2021. "The Influence of Political Capital on Peasants’ Migration Behavior and Its Implications," Land, MDPI, vol. 10(12), pages 1-17, December.
    9. Ouyang, Xiaoling & Wei, Xiaoyun & Sun, Chuanwang & Du, Gang, 2018. "Impact of factor price distortions on energy efficiency: Evidence from provincial-level panel data in China," Energy Policy, Elsevier, vol. 118(C), pages 573-583.
    10. Tian, Zhihua & Tian, Yanfang & Shen, Liangping & Shao, Shuai, 2021. "The health effect of household cooking fuel choice in China: An urban-rural gap perspective," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    11. Pi, Jiancai & Zhang, Pengqing, 2016. "Hukou system reforms and skilled-unskilled wage inequality in China," China Economic Review, Elsevier, vol. 41(C), pages 90-103.
    12. Tan, Jing & Xu, Hao & Yu, Jingwen, 2022. "The effect of homeownership on migrant household savings: Evidence from the removal of home purchase restrictions in China," Economic Modelling, Elsevier, vol. 106(C).
    13. Bonatti, Luigi & Fracasso, Andrea, 2013. "Regime switches in the Sino-American co-dependency: Growth and structural change in China," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 1-32.
    14. Qiao, Sen & Chen, Hsing Hung & Zhang, Rong Rong, 2021. "Examining the impact of factor price distortions and social welfare on innovation efficiency from the microdata of Chinese renewable energy industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    15. Adolfo, Cristobal Campoamor, 2014. "The impact of China's hukou restrictions on the aggregate national saving," MPRA Paper 57983, University Library of Munich, Germany.
    16. Rong Cui & Jeffrey H. Cohen, 2015. "Reform and the HuKou System in China," Migration Letters, Migration Letters, vol. 12(3), pages 327-335, September.
    17. Cancheng Hong & Di He & Ting Ren, 2023. "The Impact of Commercial Medical Insurance Participation on Household Debt," Sustainability, MDPI, vol. 15(2), pages 1-17, January.
    18. Xu Hengzhou & Liu Yuexi, 2016. "Policy Implications and Impact of Household Registration System on Peasants’ Willingness to Return Rural Residential Lands: Evidence from Household Survey in Rural China," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 63(1), pages 135-146, March.
    19. Zhen Wang & Mingzhi Hu & Yu Zhang & Zhuo Chen, 2022. "Housing Security and Settlement Intentions of Migrants in Urban China," IJERPH, MDPI, vol. 19(16), pages 1-16, August.
    20. Xiaodong Zheng & Yue Zhang & Yu Chen & Xiangming Fang, 2021. "Internal Migration Experience and Depressive Symptoms among Middle-Aged and Older Adults: Evidence from China," IJERPH, MDPI, vol. 19(1), pages 1-15, December.

    More about this item

    Keywords

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    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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