论文

How Urban Segregation Distorts Chinese Migrants’ Consumption?
 

Binkai CHEN^a, Ming LU^b,c and Ninghua ZHONG^d,*
a Central University of Finance and Economics, China
^b Shanghai Jiaotong University, China
^c Fudan University, China
^d Tongji University

 

Summary. — 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 16–20% 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.

 

Key words — Hukou system, consumption heterogeneity, migrants, local urban residents
                                            
^*We gratefully acknowledge the support of Shi Li, who provided the China Household Income Project data and the helpful comments from the seminar participants at the International Food Policy Research Institute, Coase Institute, Peking University, Fudan University, Shanghai University of Finance and Economics, and Southwest University of Finance and Economics. Financial support from the National Social Science Foundation of China (grant nos. 13&ZD015, 14ZDB120, and 12AZD045), the National Natural Science Foundation of China (grant nos. 71273289, 71402123, and 71172142), Shanghai Pujiang Program (grant no. 14PJC104), the Fundamental Research Funds for the Central Universities (grant no. 1200219243), the Fok Ying-Tong Education Foundation of China (grant no. 141086), the Center for China Development Studies at Shanghai Jiaotong University, and Fudan Lab for China Development Studies are greatly acknowledged. We also thank Hong Gao for her excellent research assistance. Contact the corresponding author, Ninghua Zhong, at ninghua. zhong@gmail.com. Final revision accepted: November 25, 2014.

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