Working Paper: NBER ID: w27764
Authors: Holger Sieg; Chamna Yoon; Jipeng Zhang
Abstract: Using newly available data, we document that internal migrants do not enjoy the same access to local public goods and services as city residents in China. We estimate a spatial overlapping generations model with heterogeneous households to quantify the impact of the Hukou system on urban fiscal policies and access to educational opportunities. We find that migrants provide large fiscal externalities to all major cities. We show the feasibility of alternative internal migration policies that offer the potential of decreasing the inequality within China while at the same time increasing the overall level of human capital in the economy.
Keywords: migration; urban fiscal policy; human capital; hukou system; China
JEL Codes: E6; H7; I25; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| hukou status (R28) | educational opportunities (I24) |
| hukou status (R28) | fiscal contributions of migrants (H87) |
| internal migration policies (F22) | educational access (I24) |
| internal migration policies (F22) | affordability of education (I22) |
| hukou reforms (R28) | educational attainment for migrant children (I25) |
| hukou reforms (R28) | inequality (D63) |
| migrants' housing demand (R21) | local revenues (H71) |
| high-skill migrants (J61) | fiscal externalities (H39) |
| low-skill migrants (J61) | fiscal externalities (H39) |