Bequest motive,household portfolio choice,and wealth inequality in urban China

This paper studies the role of bequest motives in household portfolio choices and wealth inequality using a computable incomplete-market life-cycle model with precautionary saving motives, accidental bequests and voluntary bequests. Calibrating the model to match the main features of household finance in China Household Finance Survey, we quantitatively measure the effect of voluntary bequest motives on the household portfolio choices and the wealth distribution in urban China. Our results indicate the importance of bequest motives in shaping the Chinese household portfolio choices and wealth inequality, and have the policy implication on the implementation of inheritance taxes to alleviate the wealth concentration and to promote household consumption in contemporary China.     

Uncertainty and housing tenure choice by household types: Evidence from China

In this paper, we propose an uncertainty-preference-housing choice model and empirically investigate the effect of uncertainty on the probability of homeownership using microdata from Chinese cities. Introducing several measures of uncertainty, we observe that after the reform of the housing distribution system, unemployment uncertainty negatively affects the housing tenure choices of high-income families, whereas educational expenditure uncertainty has a negative effect on the homeownership rates of low-income families. We also find that unemployment uncertainty negatively affects the housing choices of local families and that medical expenditure uncertainty has a negative effect on housing choice for migrant families. Finally, an increase in unemployment uncertainty decreases the homeownership rate among families in which the head of household did not experience the change in enterprise ownership.     

Planning for housing in the post-Barker era: affordability, household formation, and tenure choice

The Barker Review of Housing Supply recommended the greateruse of market indicators as the basis for providing sufficientland for future housing requirements. Worsening affordabilitywould be a sign that more land is required. However, the traditionalapproach to land release used by planners is based on trendhousehold projections. The paper shows that this will typicallylead to worsening affordability over time. The paper, therefore,develops an alternative economic model more suitable to thepost-Barker era, covering both household formation and tenurechoice. The model is used to analyse a range of policy issues,including raising home-ownership rates and home-ownership sustainability.     

Losing the future: Household wealth from urban housing demolition and children's human capital in China

Some literature observes the negative but not very significant effect of household wealth growth on children's educational outcomes. This surprising finding is not easily reconciled with the traditional explanation that relaxed economic constraints caused by wealth growth can promote human capital accumulation. This paper proposes an alternative explanation for the causal relationship between wealth growth and human capital, which could be negative: individuals tend to reduce human capital investment following the decline in their labor supply induced by wealth growth, given that investing in human capital is mainly for employment competitiveness. This explanation is supported by evidence from the case of urban housing demolition in China, in which affected households could obtain substantial wealth growth by considerable demolition compensation thanks to the real estate boom in China. Specifically, using two nationally representative datasets, we find that Chinese households that have experienced demolition relatively have more wealth, less labor supply, lower propensity to accumulate children's human capital, and consequently, have children with lower educational achievement. These results suggest that China's economy may be losing its momentum because of the decline in labor supply and human capital accumulation brought about by the ongoing large-scale urban housing demolition.     

University education,homeownership and housing wealth

We utilise the implementation of the 1999 higher education expansion in China as a natural experiment to examine the relationship between university educational attainment, homeownership and housing wealth. Using data from the 2018 China Family Panel Studies, results from our preferred models, which correct for endogeneity, suggest that having a university qualification generates a 3.5–6.3 percentage points increase in the probability of homeownership and a 24.3–51.1 percentage points increase in total housing wealth. We also find that holding a university qualification increases the number of houses one owns and housing wealth for those whose housing wealth is above the median. We find that self-reported social status and entitlement to superannuation are channels through which higher education affects homeownership and housing wealth and that financial literacy is a channel through which higher education affects housing wealth. We find considerable heterogeneity in the impact of higher education on housing outcomes across gender, family income levels, parent education and between urban and rural areas.     

Housing tenure choice and socio-economic integration of migrants in rising cities of China

Migrants' socio-economic integration is taken as one of important forms for common prosperity. And it is a crucial factor for social harmony and stability. However, the association between housing tenure choice and migrants' socio-economic integration does not receive enough attention. Based on 2017 China Migrants Dynamics Survey (CMDS), it is found migrants' socio-economic integration mainly consists of the following three aspects: Economic integration, socio-cultural integration and psychological integration. Compared with migrant renters, the socio-economic integration of migrants with houses is rather higher, while migrants' level of socio-economic integration, who live in employee's dormitories, is comparatively low, even after controlling the endogenous by using PSM and IV method. Further study indicates that the effect of housing tenure choice on migrants' socio-economic integration partly affects their settlement intention, integration will, local capital and labor supply. Heterogeneity analysis shows that new generation have a negative effect on the role of homeownership on migrants' socio-economic integration, while living in eastern China and the development of digital economy can both strengthen the effect of housing tenure choice on migrants' socio-economic integration.     

Housing wealth changes and entrepreneurship: Evidence from urban China

This paper studies the impact of household-level housing wealth changes on entrepreneurship in urban China. Exploiting the 2011–2015 China Household Finance Survey, we control for lagged proxies for wealth, city-by-year fixed effects, and other household attributes and directly estimate the magnitude of homeowner's response to housing capital gains net of home maintenance and upgrading expenditures. We also instrument for housing wealth changes with structural breaks in city housing price trend. We find that a 10,000 RMB increase in housing wealth increases the propensity of a household becoming a business owner by about 0.7 percentage points in IV estimation. In addition, we provide new evidence for underlying channels that housing capital gains alleviate household credit constraints, reduce risk aversion and increase awareness of financial information.     

Land tenure in an urban area∗

The paper considers land tenure in black townships in Grahamstown. The legal and practical difficulties which the township dwellers have in acquiring secure land rights is a reflection of their subordinate political status. All decisions about where blacks live and the laws and regulations under which they have operated since the establishment of Grahamstown have been made and administered by whites. At some periods individual whites, welfare and religious organizations have shown some sympathy and concern for the problems of blacks in the area. But such sympathy and concern has never gone so far as to permit blacks effective participation in the life of the city nor even real control over their affairs in the areas allocated to them. In view of the legal restrictions which limit the chances of blacks to gain access to land, the paper is largely a demonstration of the causes and extent of urban landlessness and what implications this situation has on policy making regarding land tenure.     

Recent housing affordability in urban China: A comprehensive overview

In this study, we provide a comprehensive overview of housing affordability in China from both the macro and micro perspectives. We extend the scope of housing affordability analysis to all Chinese cities based on a unique panel dataset in 275 Chinese prefecture cities from 2014 to 2018. We also make a novel methodological contribution to the literature by employing micro-level data from an anonymous major Chinese city in 2015. Our results suggest that the overall level of housing affordability in Chinese cities remained relatively stable or even improved during the sample period. However, we identify a few “superstar cities,” such as Beijing, Shanghai, Shenzhen, and Xiamen, which are associated with a serious housing affordability problem. This problem arises from both a shortage of supply in the space market and a potential mispricing in the asset market, and may have a spillover effect on surrounding cities due to home purchase restrictions in the superstar cities. Within these cities, the housing affordability problem leads to longer commuting time due to the separation of home and workplace, and lower housing space consumption for the residents.     

Retirement policy,employment status,and gender pay gap in urban China

China’s current retirement policy has been in effect since 1978. The legal retirement age is 50 years for female workers, 55 years for female cadres, and 60 years for male cadres and workers; women can retire 5 or 10 years earlier than men. This difference in legal retirement age may affect wage growth in those approaching retirement. Based on China’s Urban Household Survey data set, this study investigated the influence of retirement age differences on the gender pay gap. From age 30 to 49 years, the wage difference between female workers and cadres increased by approximately 15 % more than that of men. After consideration of possible endogeneity problems and demonstration of the robustness of the regression results, the study determined that such differences were likely caused by gender and identity differences at retirement age. Among workers and cadres, the retirement age policy exacerbated gender differences in wages through working hours, wage rate, career promotion, and job change activity in those approaching retirement.     

Housing inequality and housing poverty in urban China in the late 1990s

This paper discusses housing inequality and housing poverty in urban China in the late 1990s, using original household surveys. Focuses are on the distributive implications of the privatization of public-owned housing and the wave of rural–urban migration. Estimates of the imputed rent function for owned housing purchased at discount prices indicates that meritocracy and political credentialism work differently as determinants of housing inequality. The paper confirms that there has been a large disparity in housing conditions between urban and migrant households, and that a new type of housing poverty has been emerging among migrant households.     

Financial literacy,housing value and household financial market participation: Evidence from urban China

Using data from the 2012 consumer finance survey in China, we extend the literature on household finance by examining the effects of both financial literacy and housing value on household financial market participation, the role of which has been examined separately in the existing literature. The results show that financial literacy significantly improves the probability of household financial market participation, while the housing value has an obvious “crowding-out effect” on household financial market participation in urban China. Further research finds that the role of financial literacy in household financial market participation in households with a low housing value is stronger than that in households with a high housing value. Furthermore, the study of the regional differences shows that among households with a high housing value, financial literacy plays a more significant role in household bond market participation in less-developed cities. Among households with a low housing value, improvement in financial literacy plays a more significant role in household fund market participation in less-developed cities and under-developed cities. Our findings remain robust after alleviating potential bias due to endogenous problems by applying the instrumental variable (IV) method and propensity score matching (PSM) method. Finally, the paper proposes corresponding policy recommendations.     

Migration to the agricultural frontier and wealth accumulation, 1860-1870

I use a new data set of households linked between the 1860 and 1870 censuses to study frontier migration. Households that moved to the frontier to farm were more likely than non-migrants to have been poor, landless, and illiterate, and to have had young children. Also, after controlling for observable differences, migrants had below average abilities to accumulate wealth. These findings suggest fewer opportunities for migrants to accumulate wealth in non-frontier areas and a reason for their migration. Nonetheless, migrants fared well, accumulating wealth at high rates. The gains in wealth of migrants, especially those with long tenure on the frontier, suggest the extraordinary benefits of migration.     

Peri‐urban land tenure: Problems and prospects

Informal settlements in Natal are discussed. The need for and the reasons against informal settlement are examined. Means of overcoming the shortcomings of informal settlement are suggested and the need for security of tenure in order to promote ‘self‐help’ is highlighted.     

Land tenure reform and grassland degradation in Inner Mongolia,China

Since the start of the land tenure reform in the pastoral areas of China in the 1980s, grassland use rights have increasingly been assigned to individual households. However, this period has also been accompanied by extensive grassland degradation in China, which has raised the question of whether a tragedy of privatisation has occurred. This paper investigates the impact of land tenure reform on the changes in grassland condition, using data from 60 counties in Inner Mongolia between 1985 and 2008. A fixed effects model is employed to control for time-invariant factors. Two alternative model specifications in terms of land tenure reform and time-variant factors are conducted to verify the robustness of the estimation results. The results show that land tenure reform did not affect the grassland condition significantly, and the major drivers of grassland degradation include the land use change and the increase in market demand (meat prices). Thereby, we provide empirical evidence that the privatisation of grasslands did not cause grassland degradation in Inner Mongolia, China.     

Hukou system reforms and skilled-unskilled wage inequality in China

In China, rural migrant workers usually cannot get fair treatment due to the hukou system. This paper investigates how hukou system reforms affect the skilled-unskilled wage inequality through the general equilibrium approach. In the basic model, we find that an increase in the strength of hukou system reforms will narrow down the wage inequality if the urban skilled sector is more capital intensive than the urban unskilled sector. In addition, we separately extend the basic model by introducing the endogenous minimum wage and an informal sector, and find that in these two extended cases the main results of the basic model will conditionally or unconditionally hold. When we consider some empirical evidences in China, our models predict that an increase in the strength of hukou system reforms will reduce the wage inequality.     

The long shadows of war in China: Battle shocks in early life and health/wealth accumulation

This paper investigates the long-term effects of the 2nd Sino-Japanese war (1937–1945) and the later Chinese Civil War (1946–1950) on health and wealth outcomes of 45+ elder individuals in China. We find that exposure to the battle shock significantly reduces later adult health outcome such as lung function. Moreover, the later wealth accumulation is also affected negatively. According to our conservative estimates, exposure to battle shock(s) would reduce the lung capability by approximately 5% compared to the population mean and the wealth level by approximately 21% compared to the non-shocked groups. Exploiting the exogenous imposition of wealth equality during the 1950–1978 communism experiment in China, we argue it is the health accumulation channel which inherited the negative battle shocks rather than the wealth accumulation channel. We investigate quantitatively which health-model ingredients can replicate the lifecycle health/wealth dynamics of such early life shocks.     

中国信用制度建设的现状和模式选择

信用在一国经济发展中起着极其重要的作用,而现在我国社会信用体系发育程度低和普遍的信用失衡问题突显了出来,成为制约经济持续健康发展和完善社会主义市场经济体制的突出问题之一。所以,在借鉴国外信用建设的基础上,结合中国的实际,寻找出适合经济发展特点的信用建设模式,是     

Hukou and Graduates’ Job Search in China*

This paper presents evidence that graduates from rural areas, classified as non‐urban Hukou, choose to invest in higher levels of job‐search effort (as measured by number of different search methods used and the number of employers contacted) and also set a lower reservation wage, reflected in acceptance of a lower starting salary, than do comparable graduates of urban Hukou, in China. The former also appear to have higher probabilities of being employed, in terms of both their higher probabilities of receiving offers and, more importantly, their higher probabilities of acceptance. The evidence thus suggests that graduates with non‐urban Hukou face more intense pressure to gain employment in the period leading up to graduation, than do their urban counterparts. More generally, the evidence suggests that effort invested in job search is rewarded in the graduate labor market in China.     

Land tenure,logging rights,and tree planting: Empirical evidence from smallholders in China

To encourage afforestation and promote rural livelihood, China launched a new round of forest tenure reforms (CFTR) for its collective forestland in 2003. Using data spanning a long time period for rural smallholders in China, this study analyzes the causal effects of land tenure security and logging rights on tree planting investments. We address potential selection biases into tree planting and treatments using alternative estimation methods including matching methods and Heckman models. We conclude that complete logging rights over standing timber had a significantly positive effect on investments in tree planting, while the effect of secure land tenure was insignificant. Smallholders with confidence in obtaining a harvest permit invested on average 52% more in total and 36% more in seedling.