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Happiness in the dual society of urban China:Hukou identity, horizontal inequality and heterogeneous reference


  • Shiqing Jiang
  • Ming Lu
  • Hiroshi Sato


This paper studies the impact of income inequality on the subjective well-being of different social groups in urban China. We classify urban social groups according to their hukou status: rural migrants, "born?urban residents, and "acquired?urban residents who once changed their hukou identity from rural to urban. We focus on how the horizontal inequality-income disparity between migrants and urban residents-affects individual happiness. The main results are as follows. First, migrants suffer from unhappiness when the horizontal inequality increases, but urban residents show a much smaller aversion to the horizontal inequality. Second, migrants will not be happier if their relative incomes within their migrant group increase, while urban residents do become happier when their incomes increase within their group's income distribution. Third, "acquired?urban residents have traits of both migrants and "born?urban residents. They have an aversion to the horizontal inequality like migrants, and they also favor higher relative income among urban residents. Fourth, "born?urban residents have lower happiness scores when they are old. People who are Communist Party members strongly dislike the horizontal inequality. Our findings suggest that migrants, "acquired?urban residents, elderly people and Party members from "born?urban residents are the potential proponents of social integration policies in urban China.

Suggested Citation

  • Shiqing Jiang & Ming Lu & Hiroshi Sato, 2008. "Happiness in the dual society of urban China:Hukou identity, horizontal inequality and heterogeneous reference," LICOS Discussion Papers 22308, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:22308

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    References listed on IDEAS

    1. KNIGHT, John & SONG, Lina & GUNATILAKA, Ramani, 2009. "Subjective well-being and its determinants in rural China," China Economic Review, Elsevier, vol. 20(4), pages 635-649, December.
    2. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    3. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    4. Liu, Zhiqiang, 2005. "Institution and inequality: the hukou system in China," Journal of Comparative Economics, Elsevier, vol. 33(1), pages 133-157, March.
    5. Zhao Chen & Shiqing Jiang & Ming Lu & Hiroshi Sato, 2008. "How do Heterogeneous Social Interactions affect the Peer Effect in Rural-Urban Migration?:Empirical Evidence from China," LICOS Discussion Papers 22408, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    6. Shuang LI & Ming LU & Hiroshi Sato, 2008. "The Value of Power in China: How Do Party Membership and Social Networks Affect Pay in Different Ownership Sectors?," Global COE Hi-Stat Discussion Paper Series gd08-011, Institute of Economic Research, Hitotsubashi University.
    7. Appleton, Simon & Song, Lina & Xia, Qingjie, 2005. "Has China crossed the river? The evolution of wage structure in urban China during reform and retrenchment," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 644-663, December.
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    Cited by:

    1. Leonardo Becchetti & Riccardo Massari & Paolo Naticchioni, 2014. "The drivers of happiness inequality: suggestions for promoting social cohesion," Oxford Economic Papers, Oxford University Press, vol. 66(2), pages 419-442.
    2. Luo,Xubei & Zhu,Nong, 2015. "Hub-periphery development pattern and inclusive growth : case study of Guangdong province," Policy Research Working Paper Series 7509, The World Bank.
    3. Leonardo Becchetti & Alessandra Pelloni, 2013. "What are we learning from the life satisfaction literature?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 60(2), pages 113-155, June.
    4. Becchetti, Leonardo & Castriota, Stefano & Corrado, Luisa & Ricca, Elena Giachin, 2013. "Beyond the Joneses: Inter-country income comparisons and happiness," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 187-195.
    5. Hau Chyi & Shangyi Mao, 2012. "The Determinants of Happiness of China’s Elderly Population," Journal of Happiness Studies, Springer, vol. 13(1), pages 167-185, March.
    6. Ming Lu & Hong Gao, 2010. "When Globalization Meets Urbanization: Labor Market Reform, Income Inequality, and Economic Growth in the People’s Republic of China," Working Papers id:3095, eSocialSciences.

    More about this item


    Horizontal inequality; Happiness; Hukou identity; Migration; Social integration;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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