The Effect of China Hukou System on Internal Migration

Open Access
Author:
He, Dongyang
Area of Honors:
Mathematics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • James R. Tybout, Thesis Supervisor
  • Nathanial Patrick Brown, Honors Advisor
Keywords:
  • hukou
  • equilibrium model
  • migration
  • China
  • trade
Abstract:
Hukou system has played an important role in controlling and regulating internal migration in China, especially rural-urban migration. Since it was introduced in the 1950s, it has undergone various reforms in response to the changing situations. While the increase of migration rate since 1980s is obvious, besides hukou reforms, there are many other factors that can contribute to the increase, such as economic development or increasing urban labor demand. As a result, the increasing migration rate does not necessarily imply the restrictive effect of hukou on migration is weakening. In this paper, I estimate the change of migration friction between 2000 and 2015 to answer a central question: How much does hukou reforms improve migrants' welfare and reduce migration friction? I begin the discussion by first providing a brief review of the history of hukou with a focus on the social and economic context of major hukou reforms. With province-level data in 2000, 2005, 2010 and 2015, I then estimate the change of migration friction over the recent years using a spatial equilibrium model. I found that migration friction across almost all provinces in 2005, 2010 and 2015 are below 2000 level. In particular, compared to urban migrants, rural migrants experienced a larger decrease in migration friction between 2000 and 2015. Further analysis indicates that recent major hukou reforms have limited impact on the change of migration friction, and many other factors, such as rising housing prices, may have contributed to the change of migration friction as well.