Hukou and Consumption Heterogeneity: Migrants' Expenditure Is Depressed by Institutional Constraints in Urban China

Binkai Chen, Ming Lu and Ninghua Zhong ()

Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: This paper provides a new explanation for China's extremely low consumption-to-GDP ratio, highlighting the constraints of the "household registration system" (Hukou) on China's household consumption. Our baseline results show that the consumption of migrants without an urban Hukou is 30.7% lower than that of urban residents. Moreover, consumption heterogeneity cannot be explained by migration effects, culture, social norms, habits or some other forms of household heterogeneity. Further studies on the composition of household consumption have shown that the gaps are largest in areas such as education and culture, durable goods and health. As both the number and income level of migrants are rising, the constraining effects of Hukou on household consumption will continue to increase.

Keywords: Consumption; Heterogeneity; Hukou System; Migrants; Urban Residents (search for similar items in EconPapers)
JEL-codes: E21 R23 (search for similar items in EconPapers)
Date: 2012-02
New Economics Papers: this item is included in nep-dev, nep-mig, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:hst:ghsdps:gd11-221

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