Endogenous Migration Restrictions and Population Aging in China

Abstract

This paper examines how local governments in China respond to aging by reducing migration restrictions through Hukou reforms. We construct a novel city-level panel dataset on Hukou reform spanning 1998 to 2024 and employ a Bartik IV of local aging rates to estimate the causal impact of aging on Hukou policy changes. We find that cities experiencing higher levels of aging are more likely to lower Hukou settlement requirements for migrants, and this effect is more pronounced in prefectures experienc- ing lower fertility rates. Mechanism analysis further highlights the important role of population aging as a driver of labor market deregulation and urban development.

Keywords: Population Aging, Migration, Hukou Reform, Urban Development