Abstract

http://ssrn.com/abstract=1989257
 


 



How Urban Segregation Distorts Chinese Migrants’ Consumption?


Binkai Chen


Central University of Finance and Economics (CUFE)

Ming Lu


Fudan University - School of Economics

Ninghua Zhong


Tongji University - School of Economics and Management

November 25, 2014

World Development, Vol. 70, 2015

Abstract:     
This paper provides a new explanation for China’s low consumption-to-GDP ratio by highlighting the constraints of the “household registration system” (Hukou) on China’s household consumption. Our baseline results show that the consumption of migrants is 16 percent to 20 percent lower than that of local urban residents. We further find evidence suggesting that, caused by Hukou restrictions, migrants save more for precautionary purposes, have lower expectation of permanent income, and consume much less durable goods because of high mobility. Moreover, we have found no evidence that the consumption heterogeneity can be explained by migration effects, culture, or other forms of household heterogeneity. As both the number and income level of migrants are rising quickly, the constraining effects of Hukou on household consumption is increasing.

Number of Pages in PDF File: 47

Keywords: Hukou system; consumption heterogeneity; migrants; local urban residents

JEL Classification: R23, E21


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Date posted: January 22, 2012 ; Last revised: June 1, 2015

Suggested Citation

Chen, Binkai and Lu, Ming and Zhong, Ninghua, How Urban Segregation Distorts Chinese Migrants’ Consumption? (November 25, 2014). World Development, Vol. 70, 2015. 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)
Tongji University - School of Economics and Management ( email )
Tongji A Building,
No.1 Zhangwu Road
Shanghai, Shanghai 200092
China
HOME PAGE: http://sem-international.tongji.edu.cn/Faculty/faculty_detail.asp?id=410
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