Urbanization policy and economic development: A quantitative analysis of China's differential hukou reforms
The household registration system (hukou system) in China has hampered rural-urban migration by posing large migration friction. The system has been gradually relaxed in the past few decades, but the reforms have been differential in city size. We find a striking contrast in migration patterns betwe...
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| Main Authors: | , |
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2021
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| Online Access: | https://ink.library.smu.edu.sg/soe_research/2506 https://ink.library.smu.edu.sg/context/soe_research/article/3505/viewcontent/urbanization_policy_and_china_s_economic_development_combine.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | The household registration system (hukou system) in China has hampered rural-urban migration by posing large migration friction. The system has been gradually relaxed in the past few decades, but the reforms have been differential in city size. We find a striking contrast in migration patterns between years 2005 and 2015; rural people tended to move more to large cities in 2005, but more to small- and medium-sized cities in 2015. We calibrate a spatial quantitative model to the world economy in both years with China divided into rural, mega-city, and other-city regions. We find that alternative urbanization policies that are not differential and that are more laissez-faire substantially improve national welfare, in magnitudes that are comparable to the welfare gains from the trade liberalization that China has put in place in the past. |
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