Understanding Chinese consumption: The impact of hukou
Capital investment and exports have driven China’s remarkable economic growth for decades, but recent trends have put pressure on the government to move to a more consumption-driven model of growth. Unfortunately, China’s institutional framework does little at the moment to spur household consumption. While the country’s weak social security setup and highly regulated financial markets are routinely cited as disincentives to private consumption, the role of the hukou household registration system in depressing consumption gets less attention. Controlling for income levels on datasets from 2002 and 2007, we show the average propensity to consume is significantly lower for internal migrants to cities. Official figures suggest that China in 2013 had about 260 million internal migrants. These individuals are often separated from their families for long periods and denied access to public services in the cities where they work. The government’s current urbanization strategy calls for increasing migrant populations in cities, which, in the absence of hukou reform, is likely to further dampen consumption.
|Date of creation:||17 Feb 2014|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
Web page: http://www.suomenpankki.fi/bofit_en/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Xin Wang & Yi Wen, 2012.
"Housing prices and the high Chinese saving rate puzzle,"
2012-038, Federal Reserve Bank of St. Louis.
- Wang, Xin & Wen, Yi, 2012. "Housing prices and the high Chinese saving rate puzzle," China Economic Review, Elsevier, vol. 23(2), pages 265-283.
- Franklin Allen & Jun "QJ" Qian & Chenying Zhang & Mengxin Zhao, 2012.
"China's Financial System: Opportunities and Challenges,"
NBER Working Papers
17828, National Bureau of Economic Research, Inc.
- Franklin Allen & Jun & Chenying Zhang & Mengxin Zhao, 2012. "China's Financial System: Opportunities and Challenges," NBER Chapters, in: Capitalizing China, pages 63-143 National Bureau of Economic Research, Inc.
- Barry Naughton, 2007. "The Chinese Economy: Transitions and Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640643, June.
- Ma, Guonan & Yang, Dennis T., 2013. "China's High Saving Puzzle," IZA Discussion Papers 7223, Institute for the Study of Labor (IZA).
- Steckel, Richard H., 2009.
"Heights and human welfare: Recent developments and new directions,"
Explorations in Economic History,
Elsevier, vol. 46(1), pages 1-23, January.
- Richard H. Steckel, 2008. "Heights and Human Welfare: Recent Developments and New Directions," NBER Working Papers 14536, National Bureau of Economic Research, Inc.
- Shang-Jin Wei & Xiaobo Zhang, 2009.
"The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China,"
NBER Working Papers
15093, National Bureau of Economic Research, Inc.
- Shang-Jin Wei & Xiaobo Zhang, 2011. "The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China," Journal of Political Economy, University of Chicago Press, vol. 119(3), pages 511 - 564.
- Feng, Jin & He, Lixin & Sato, Hiroshi, 2009. "Public pension and household saving: Evidence from China," BOFIT Discussion Papers 2/2009, Bank of Finland, Institute for Economies in Transition.
- Riccardo Cristadoro & Daniela Marconi, 2011.
"Households' savings in China,"
Temi di discussione (Economic working papers)
838, Bank of Italy, Economic Research and International Relations Area.
When requesting a correction, please mention this item's handle: RePEc:hhs:bofitp:2014_007. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Päivi Määttä)
If references are entirely missing, you can add them using this form.