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The impact of China's hukou restrictions on the aggregate national saving

Cristobal Campoamor Adolfo
Authors registered in the RePEc Author Service: Adolfo Cristobal-Campoamor ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper presents a model accounting for the impact of the Chinese rural-urban migration on the stock of aggregate saving and the skill composition of the urban labor force. The novel mechanism through which immigration affects labor-market outcomes is the availability of new loanable funds for investment, which also results in endogenous skill upgrading. Given their rural hukou, which determines their higher training costs in the city, migrants skip the financial costs of human capital or residential investment. As a result, they self select as net lenders, which reduces the equilibrium local interest rates and facilitates the investment mostly of new generations of urbanites. Consequently, the aggregate labor income of people with urban hukou increases with immigration.

Keywords: Rural-to-Urban Migration; hukou; human capital; saving rate (search for similar items in EconPapers)
JEL-codes: J61 O15 P35 (search for similar items in EconPapers)
Date: 2014-08-17
New Economics Papers: this item is included in nep-mig and nep-tra
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Handle: RePEc:pra:mprapa:57983