Abstract

http://ssrn.com/abstract=1989257
 


 



Hukou and Consumption Heterogeneity: Migrants’ Expenditure is Depressed by Institutional Constraints in Urban China


Binkai Chen


Central University of Finance and Economics (CUFE)

Ming Lu


Fudan University - School of Economics

Ninghua Zhong


Hong Kong University of Science & Technology - Department of Finance

January 20, 2012


Abstract:     
This paper provides a new explanation for China’s extremely low consumption-to-GDP ratio, highlighting the constraints of the “household registration system” (Hukou) on China’s household consumption. Our baseline results show that the consumption of migrants without an urban Hukou is 30.7% lower than that of urban residents. Moreover, consumption heterogeneity cannot be explained by migration effects, culture, social norms, habits or some other forms of household heterogeneity. Further studies on the composition of household consumption have shown that the gaps are largest in areas such as education and culture, durable goods and health. As both the number and income level of migrants are rising, the constraining effects of Hukou on household consumption will continue to increase.

Number of Pages in PDF File: 43

Keywords: Consumption, heterogeneity, Hukou system, migrants, urban residents

JEL Classification: R23, E21

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Date posted: January 22, 2012  

Suggested Citation

Chen, Binkai and Lu, Ming and Zhong, Ninghua, Hukou and Consumption Heterogeneity: Migrants’ Expenditure is Depressed by Institutional Constraints in Urban China (January 20, 2012). Available at SSRN: http://ssrn.com/abstract=1989257 or http://dx.doi.org/10.2139/ssrn.1989257

Contact Information

Binkai Chen
Central University of Finance and Economics (CUFE) ( email )
Beijing
China
Ming Lu
Fudan University - School of Economics ( email )
600 GuoQuan Road
Shanghai, 200433
China
Ninghua Zhong (Contact Author)
Hong Kong University of Science & Technology - Department of Finance ( email )
Clear Water Bay, Kowloon
Hong Kong
852-51357096 (Phone)
HOME PAGE: http://www.bm.ust.hk/phd_profile/index.php/pub/student/zhongnh
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