Modeling migration barriers in a two-sector framework: A welfare analysis of the hukou reform in China
Gary Fields () and
Yang Song ()
Economic Modelling, 2020, vol. 84, issue C, 293-301
The present paper constructs a two-sector labor market model for China featuring endogenous internal labor mobility and heterogeneous costs of migration induced by the Chinese household registration system (hukou). The main novelty of our model is to divide migrants into those with more family responsibilities and those with fewer to explain the empirical fact that almost all young people with rural hukou have migrated to cities, while people who stay in the rural area are older and have more family responsibilities. We conduct two policy experiments using the model: one experiment concerned with reducing costs of living for younger migrants and the other for older migrants. The main results are that the first policy would unambiguously increase social welfare, while the reduced-cost policy for older migrants would reduce poverty and inequality although some urban natives may experience a wage reduction.
Keywords: Segmented labor markets; Migration barriers; Costs of migration; Welfare analysis; Hukou (search for similar items in EconPapers)
JEL-codes: I3 J2 O1 R1 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:84:y:2020:i:c:p:293-301
Access Statistics for this article
Economic Modelling is currently edited by S. Hall and P. Pauly
More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().