The Effects of Household Registration System Discrimination on Urban-rural Income Inequality in China
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| Title | The Effects of Household Registration System Discrimination on Urban-rural Income Inequality in China
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| Author | Wan Haiyuan and Li Shi |
| Organization | Research Institute of Social Development, NDRC, China, School of Economics and Management, Beijing Normal University |
| Email | why842000@163.com；lishi@bnu.edu.cn |
| Key Words | Household registration system; Discrimination; Quasi-experiment program evaluation approach; Income inequality |
| Abstract | The central target of this paper is to measure the discrimination effect of household registration system (hukou policy) on urban-rural income inequality. In order to overcome the self-selection problems from hukou type change and the biased problem because of the absence of experiment data, we used the Propensity Score Matching with Difference-in-Difference method (PSM-DID) to construct counterfactual randomized experiment to evaluate the discrimination effect of hukou on urban-rural income inequality with panel dataset collected by RUMIC in 2007 and 2008. The results demonstrate that hukou policy does exert significant discriminatory impacts on urban-rural income inequality in 2007 and 2008, while an urban hukou increases income level by 3.5% on average. Meanwhile, it actually belongs to a kind of discrimination effect coming from hukou according to the income definition in this paper. While excluding the hukou discrimination, the overall income inequality decreases to a large extent. On average, the Gini coefficient drops from 0.49687 to 0.4883 while excluding the hukou discrimination. So, it shows a great impact of hukou discrimination on income inequality in China. Considering the long-standing and continued effect of the discrimination and its large explaination for the overall income inequality, we reasonably expect that the high income inequality will be continued in the coming years in China. |
| Serial Number | WP442 |
| Time | 2013-06-24 |
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