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Remittances and relative concerns in rural China

Alpaslan Akay, Olivier Bargain, Corrado Giulietti (), Juan D. Robalino and Klaus Zimmermann ()
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Alpaslan Akay: GU - University of Gothenburg , IZA - Institute for the Study of Labor
Olivier Bargain: GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales

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Abstract: The paper investigates the impact of remittances on the relative concerns of households in rural China. Using the Rural to Urban Migration in China (RUMiC) dataset we estimate a series of subjective well-being functions to simultaneously explore relative concerns with respect to income and remittances. Our results show that although rural households experience substantial welfare loss due to income comparisons, they gain well-being by comparing their remittances with those received by their reference group. In other words, we find evidence of a "status effect" with respect to income and of a "signal effect" of similar magnitude with respect to remittances. This finding is robust to various specifications, alternative reference group definitions, controls for the endogeneity of remittances and selective migration, as well as the use of migrants' net contribution to household income.

Keywords: Positional concerns; Remittances; Subjective well-being (search for similar items in EconPapers)
Date: 2016-02
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Published in China Economic Review, Elsevier, 2016, Special Issue on Human Capital, Labor Markets, and Migration, 37, pp.191--207. ⟨10.1016/j.chieco.2015.12.006⟩

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Journal Article: Remittances and relative concerns in rural China (2016) Downloads
Working Paper: Remittances and Relative Concerns in Rural China (2015) Downloads
Working Paper: Remittances and Relative Concerns in Rural China (2015) Downloads
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DOI: 10.1016/j.chieco.2015.12.006

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