PhD Job Market Practice

Speaker: Zhuotong Liu

Title: Wage, Social Welfare and hukou System Affect Internal Migration in China: a Dynamic Analysis

Format: Hybrid

Abstract:China’s household registration system (hukou) imposes restrictions on labour mobility. The main barrier is that the access of public services conditional on holding a local hukou but not residing location. Despite these constraints, China has still witnessed an unparalleled internal migration in world history. This paper develops a general equilibrium dynamic discrete choice model and estimates it using data from the China Family Panel Survey (CFPS) wave 2010-2018 to examine individuals’ migration and employment choices throughout their lifetimes, thereby providing micro-foundational evidence for the relevant studies. I show that migration rates for low-skilled and high-skilled workers increase by 27.0% and 4.8% respectively by easing hukou system. Meanwhile, the labour market participation rates on employed labour market rise by 7.9% for low-skilled workers and 1.2% for high-skilled workers. These shifts contribute to a 6.9% increase in the GDP excluding agricultural sector, and improve social welfare by 2.0%; however, they also exacerbate wage inequality between low-skilled and high-skilled workers in urban areas. The aforementioned effects will be dramatically intensified if hukou system is entirely eliminated.

Organisers: Derrick, Dipima

For more information, please contact the organisers.