Social Identity and Inequality: The Impact of China's Hukou System

Farzana Afridi, Sherry Xin Li () and Ren Yufei
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Sherry Xin Li: University of Texas at Dallas

No 6417, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We conduct an experimental study to investigate the causal impact of social identity on individuals' response to economic incentives. We focus on China's household registration (hukou) system which favors urban residents and discriminates against rural residents in resource allocation. Our results indicate that making individuals' hukou status salient and public significantly reduces the performance of rural migrant students on an incentivized cognitive task by 10 percent, which leads to a significant leftward shift of their earnings distribution. The results demonstrate the impact of institutionally imposed social identity on individuals' intrinsic response to incentives, and consequently on widening income inequality.

Keywords: social identity; inequality; field experiment; hukou; China (search for similar items in EconPapers)
JEL-codes: C93 D03 O15 P36 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2012-03
New Economics Papers: this item is included in nep-cbe, nep-cna, nep-dev, nep-exp, nep-pbe, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published - published in Journal of Public Economics,Vol. 123, March 2015: 17-29

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Related works:
Journal Article: Social identity and inequality: The impact of China's hukou system (2015)
Working Paper: Social Identity and Inequality--The Impact of China’s Hukou System (2010)
Working Paper: Social Identity and Inequality: The Impact of China's Hokou System (2010)
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