Migration constraints and development: Hukou and capital accumulation in China

Rural–urban migration flows are a crucial corollary of economic development. The adverse or beneficial effects of internal migration, for sending as well as receiving areas, and the definition of optimal migration policies, have remained much discussed issues since the seminal works of Harris and Todaro (1970). This debate is especially acute in China where the “household registration system” (hukou) acts as a strong constraint on individual migration. This paper aims to assess the consequences of hukou through a simple model of a developing dual economy with overlapping generations. Contrary to existing studies focused on the contemporaneous allocation of economic resources, it deals with the dynamic consequences of migration flows and migration policies. It shows that, in fairly general circumstances, hukou-related migration constraints can actually hasten development, understood as the transfer of the labor force to the modern sector, driven by capital accumulation. The hukou system could thus be one of the causes of the extremely high Chinese saving rate and of the high pace of Chinese development. Insights from the model are confronted with stylized facts from the Chinese development, and theoretical results are especially consistent with the effects of the 2001 “towns and small cities” reform.     

What should economists know about the current Chinese hukou system?

This article explains the current hukou system in China and provides the most recent evidence on the impact of the hukou system on the Chinese labor market and economy. By a comprehensive literature survey, this paper shows that the hukou system plays in two major roles in current China. First, workers with different hukou face different costs of living in cities and have different access to government-provided public services and welfare programs in the urban areas. Migrants with rural and non-local hukou working in the Chinese big cities have no or little access to welfare programs provided by local city governments. Second, there exists labor market discrimination against rural hukou holders in cities, especially in the urban high-wage sector such as state-owned enterprises. The current hukou system has a negative impact on rural-to-urban migration in China as well as on economic efficiency and equality by reducing the expected benefits associated with migration.     

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.     

China's urban poor – Comparing twice poverty between residents and migrants in 2013 and 2018

Using data from the China Household Income Project in 2013 and 2018, this paper studies relative poverty among rural hukou holders living in urban China and urban hukou holders. People living in households with an income below a fixed percent of the median per-capita income and wealth below the same fixed percent of the median per-capita wealth among urban residents are deemed as relative poor. Although migrants with rural hukou living in urban China were more prone to twice poverty than urban residents in 2013, this was not generally the case in 2018.A multivariate analysis shows several factors to be related to the probability of being twice relative poor. Even considering these factors, a rural hukou status increased the probability of being twice relative poor in 2013. In contrast, such an excess risk of being twice relative poor was much lesser outspoken in middle and low-ranking cities in 2018. However, rural to urban migrants living in high-ranking cities had a somewhat higher risk of being relative poor than urban residents with the same characteristics in 2018.     

Returns to education in China: Evidence from the great higher education expansion

China experienced a near 5-fold increase in annual Higher Education (HE) enrolment in the decade starting in 1999. Using the China Household Finance Survey, we show that the Great HE Expansion has exacerbated a large pre-existing urban-rural gap in educational attainment underpinned by the hukou (household registration) system. We instrument the years of schooling with the interaction between urban hukou status during childhood and the timing of the expansion – in essence a difference-in-differences estimator using rural students to control for common time trends. We find that the Great HE raised earnings by 17% for men and 12% for women respectively, allowing for county fixed-effects. These Two Stage Least Squares (2SLS) estimates, which are robust to additional controls for hukou status at birth fully interacted with birth hukou province, can be interpreted as the Local Average Treatment Effect (LATE) of education on earnings for urban students who enrolled in HE only because of the Great HE Expansion. For the selected subsample of respondents with parental education information, we find that the 2SLS returns for students from more disadvantaged backgrounds are at least as high as their more advantaged counterparts, for both genders.     

What determines employment opportunity for college graduates in China after higher education reform?

Using the 2005 placement data from two separate colleges, this paper studies graduate job allocation in China after higher education reform. Other things being equal, graduates with better college GPA were more likely to be employed (in particular by high-pay foreign firms) in both colleges. Female advantage in GPA helped to produce a surprising gender employment gap favoring female graduates. Our empirical evidence does not support the three alternative hypotheses of such a gap. Even though the job-market returns to GPA might be higher for women, there is some weak evidence that the job-market preferred male graduates over their female peers with similar qualifications. Pre-college urban hukou status and a proxy of father's education had positive impacts on a graduate's educational and employment outcomes. There is no evidence that father's Communist Party membership mattered.     

China's Pension Reform: A Precondition Approach

Abstract

China has a relatively young population, but is about to undergo a remarkable demographic transformation. Given the un-sustainability of the old system, the Chinese authorities have initiated a number of pension reforms since the early 1990s. In this paper, based on latest precondition framework, we analyse and conclude that the initial economic and financial conditions within the reform started in China are sufficient to facilitate funding based pension reform.     

Income inequality and subjective wellbeing: Panel data evidence from China

Using four waves of longitudinal data from the China Family Panel Studies (CFPS), we examine the effects of income inequality on subjective wellbeing (SWB). We take a dual approach in measuring income inequality, and thus, we examine the effects of inequality using province-level Gini coefficient as well as between-group inequality or identity-related inequality defined as the income gap between migrants without urban household registration identity (hukou) and urban residents. We find negative effects of both province-level income inequality and between-group income inequality on SWB, measured by life satisfaction. Our results also show that the effects of income inequality on SWB is stronger for rural hukou residents compared to urban hukou residents. These findings are robust to alternative ways of measuring SWB and income inequality. In addition, we find evidence suggesting that neighbourhood trust is an important channel through which income inequality operates to reduce SWB. We suggest policies that promote trust in communities with high inequality with a view of addressing the negative effects of inequality on SWB.     

Estimating the earnings returns to exam-measured unobserved ability in China's urban labor market: Evidence for 2002–2013

China's education system uses exams to measure students' ability. How does the labor market reward the ability that raises exam scores? This paper uses proxies to estimate the labor market returns to ‘exam ability’ in China. The estimated returns to one standard deviation of the ‘exam ability’ are 8% in 2002, 12% in 2007, and 7% in 2013 for the urban population with local hukou and high school and above education. The exam ability explains more wage variation than years of schooling or the level of education degree. There is still a significant amount of unexplained wage variation. It is possible that there are more important labor market skills that are not captured by schooling and exam scores.     

发展“假日经济”的思路探析

改革开放以来 ,随着经济发展和人民生活水平的不断提高 ,我国的城乡居民收入差距呈现出不断扩大化趋势。本文认为解决这一问题的关键在于 :扩大就业 ,使就业方式从正规就业向非正规就业转变 ,从而提高社会经济效率及实现社会公平。     

A tale of two cities – the development and reform experiences of Shenzhen and Shanghai

Following gaige kaifang, the twin strategy of reform and opening up, Shenzhen has been designated as a Special Economic Zone. The city appeared to have bright future and would serve as the growth engine in China. Despite having an impressive record of economic development since 1979, the prestige of Shenzhen as a commercial centre has always been overshadowed by Shanghai and Hong Kong. A breakthrough finally came when the State Council of China decided to develop Qianhai, a town near Shenzhen, into an international commercial centre. However, shortly after, the China (Shanghai) Pilot Free Trade Zone representing an unprecedented degree of openness in relation to foreign investment and international trade was launched. No one seems to remember the once-hopeful Qianhai area. The aim of this paper is to examine the path of development of the two leading commercial centres in China amidst the wider context of Chinese economic reform. A common issue facing both cities is, although the state generally has no problem in outlining a vision of reform, a translation of this vision into actual credible measures that could be implemented is often problematic.     

Why do migrant households consume so little?

Exploring data from the migrant and urban household surveys of the Chinese Household Income Project, this paper dissects the underlying causes of the depressing effect of the hukou system on migrant household consumption to two channels. On one hand, migrants' disentitlement to local urban hukou creates financial insecurity through barriers to employment, social welfare, medical insurance, etc., thereby encouraging precautionary saving. On the other hand, it promotes temporary migration, allows divergence in tastes and values from local urban residents to persist, and incentivizes migrant households to save their transitory income. Factors reflecting these two channels, such as medical and pension insurances, the duration of migration, and local homeownership, are specifically modeled, and they are found to contribute to the discrepancies in consumption between migrant and local urban households, among other factors. In addition, the marginal propensity to consume exhibits heterogeneity across migrant households; it is higher with a longer duration of migration, local homeownership, and self-employment. The lack of these attributes further reinforces the reluctance of migrant households to consume.     

我国农村消费品流通体制的演变及其特征

农村消费品流通的便利和通畅对于活跃农村市场,拉动内需具有重要意义。我国农村消费品流通体制改革的基本过程主要分为五个阶段:新中国成立初期的农村消费品自由购销体制、计划经济时期的统购统销体制、改革开放初期的农村消费品流通统购统销体制的放开、计划商品经济向市场经济转变阶段的农村消费品流通市场经济体制的过渡以及完善农村消费品流通的市场体系。文章主要分析了每个阶段的流通体制、流通渠道和流通主体,较为清晰地再现了我国农村消费品流通体制的变化及其特征。     

Population Ageing and Pension System Reform in China: A Computable Overlapping-Generations General Equilibrium Model Analysis

Over the next 50 years, China will face an increase of its old-age population by approximately three times. Such a demographic change may result in a large increase of pension payments, which would require a significant rise in the pension contribution rate. This also implies important intergenerational redistribution issues and may even harm living standards as a whole. This paper analyses for China the economic impact of an ageing population by means of a computable dynamic general equilibrium model with an overlapping generations structure. The paper explores the effect on the social security system and economic development of China under alternative scenarios for the benefit rates on pensions, retirement age and technological progress. Our research indicates that a pension reform plus positive technological progress can compensate for the menace of a decline in living standards for both seniors and working generations.     

Effects of public health policies on the health status and medical service utilization of Chinese internal migrants

This paper examines the effects of the “Equalization Program of Basic Public Health and Family Planning Services for Migrants” (EHFPSM), a novel internal migrant-targeted public health policy, of China implemented in 2013. By combining the individual-level data from the “China Migrants Dynamic Survey” and city-level statistical data, we find that EHFPSM contributes to a 6.9% statistically significant increase in the probability of electronic health records coverage and a 7.2% increase in the probability of reimbursement in the last inpatient visit, as well as a 1.2% decrease in the probability of one-year prevalence. The mechanism test shows that this program promotes the migrants' understanding of the policies and social insurance coverage to enhance their health status. EHFPSM brings about more significant decreases in disease prevalence for male and less-educated migrants, and higher reimbursement probability for urban hukou migrants. Our paper facilitates better understanding of the role of public health policies in promoting the internal migrants' health from the perspective of China.     

On Privatisation and Property Rights: Should China Go Down the Road of Outright Privatisation?

Fierce debate is ongoing in China concerning the appropriate role for the private sector in the current stage of reform and enterprise restructuring. There are many economists, both within China and without, who argue that China should now increase both the scale and pace of privatisation and reduce the barriers to private sector involvement in the remaining large-sized State-Owned Enterprises as a matter of urgency. This paper argues, however, that on both theoretical and empirical grounds, wholesale privatisation in China should not be adopted, that ‘fuzzy’ property rights have served China well in the last twenty years of reform and that the appropriate boundary between the public and private sectors should be drawn pragmatically and on a case-by-case basis.     

2001年以来的中国盐业体制改革

2001年以来,中国盐业体制改革经历了三个时期：国家经贸委主导改革时期（2001—2003年）,这一时期虽然拉开了改革的帷幕,但是存在思想解放不够、改革措施不配套等问题;国家发改委负责改革时期（2004—2008年）,这一时期改革在部分地区取得了实质性的进展和突破,但是改革的进程并没有大幅度推进;国家发改委和工信部联合改革时期（2009—2010年）,这一时期党中央和国务院高度重视,改革全面提速、有力推进,但是改革方案仍未出台。     

Social security and trust fund management

In this paper we investigate why and to what extent the government should have a social security trust fund, and how it should manage the fund in the face of demographic shocks, based on a simple overlapping-generations model. We show that, given an aging population, a trust fund in some form could achieve the (modified) golden rule or to offset the negative income effect of a PAYGO system. Besides, in a closed economy where factor-prices effects dominate, using the trust fund as a buffer for demographic shocks could lead to a widening of intergenerational inequality. We also the discuss policy implications of our analysis on the social security reform debate in Japan, including the fixed tax method and the use of the trust fund in the face of a rapidly aging population. J. Japanese Int. Economies 18 (4) (2004) 528–550.     

国有商业银行改革进展回顾与评价

自2004年以来,随着国有商业银行改革的全面提速,国有商业银行改革再次成为我国经济和金融领域的热点问题。通过对国有商业银行发展历程及制度改革的简要回顾,文章对国有商业银行改革中存在的问题进行了分析和探讨。     

转型时期的中国养老保险:融资方式、制度建构与可持续发展

基本养老保险制度改革与建设是我国当前改革和建设的重点。我国目前的基本养老保险制度虽然在名义上是部分积累的,但实际上仍然是现收现支的。所以,我国城镇企业职工养老金制度改革因个人账户连年出现"空账",其可持续性就成了一个问题。分析原因,我们认为,"空账"的根源在于"老