何英华EffectsofHRS

TheEffectofHouseholdRegistrationSystemonInternalMigrationinChinaYinghuaHE*November,2003[Paperpreparedforthe3rdannualconferenceofChineseEconomicsAssociation,December20-21,Shanghai,China]Abstract:HouseholdRegistration(Hukou)SystemwasoneofthemaininstitutionsofChina’sformerplannedeconomy,andstillremainsasamajormeasureofregulatingthesociety.Thepapermodelsthedeterminationmigrant’shukoustatus.Inthemodel,Hukoustatusofthemigrantsisjointlydeterminedbymigrantsandthegovernment;itinvolvestheproblemsofpartialobservabilityandmultiplecriteriaforselectivity.UnliketheHukoudecisionofthegovernment,heHukoudecisionofindividualtakesintoaccounttheattributesofhisorigin;thepapertakesthisastheidentificationofthejointlydecisionmodel.Tocorrecttheselectivitybias,thepaperadoptsa2-stepestimationstrategy—firstlyanestedlogitmigrationdecisionmodelforreducedformestimation,secondlyajointdecisionmodelfortheestimationofHukoustatusdetermination.ThepaperthenconstructaproxyfortheStrictnessofHouseholdRegistrationSystem(SHRS)ofdifferentprovincesinMainlandChina,whichisthelikelihoodforthegovernmenttograntaHukoutoacertainmigrant.BasedontheevaluationofSHRS,theestimationoftheeffectontheinternalmigrationbecomesfeasible.Usingthe2000censusdata,theresultsrevealthatthehighSHRSattractedbothurbanandrurallaborerstomigratethere.Keywords:HouseholdRegistrationSystem,PartialObservability,SelectivityBiaswithMultipleCriteria,JointDecisionModel,NestedLogitModel.*ChinaCenterforeconomicResearch,PekingUniversity.MailingAddress:ChinaCenterforeconomicResearch,PekingUniversity,Beijing100871,P.R.China.Tel:[phone].E-mailaddress:[e-mail]ohnGiles,JustinYifuLin,AlbertPark,MinggaoShen,YaohuiZhao,ZhongZhao,andfellowstudentsGeweiWangandDongZhaofortheirvaluablecomments.TheEffectofHouseholdRegistrationSystemonMigrationI.IntroductionHouseholdRegistration(Hukou)SystemwasoneofthemajorinstitutionalarrangementsofChina’sformerplannedeconomy.Itwasdesignedtoregulatethemobilityofpopulation.After25yearsofreform,mostofthoseinstitutionshavebeenabolished,whileHRSremainsinoperation.NooneinMainlandChinawoulddisputeitssignificanceinaffectingher/hislife.Itsfunctionsgofarbeyondsimplycontrollingpopulationmobility;anditissimilartoadefactointernalpassportmechanism,particularlyinthepre-reformera.UnderHRS,themostimportantelementisHukou.ItissimilartoPermanentResidencyorevencitizenshipexceptthatitwasdesignedtoprohibittheinternalmigrationinChina.EveryregisteredpersonatacertainplaceholdsaHukouofthatparticularplace.Thepeoplewhodon’tholdalocalHukouaredeprivedofsubstantiallocalbenefits.Forexample,theyareexcludedfromlocalsocialsecuritysystems,andtheirchildrencan’tbeadmittedintolocalschoolsorhavetopayamuchhigherfee.Atthesametime,ifonedecidestomigratetoadifferentplaceandwishestotransfertheHukoutothatplace,itinvolvessignificantcosts.ThereforetheHukoutiesthepeopletoacertainplace,increasesthecostofmigration,andthusdiscouragesmigration.Despitethisinstitutionalbarrier,however,thelargesthumanmigrationinthehistorystilloccurred.Themagnitudeofmigrantsduring1995-2000wasover100million.WhataretheeffectsofHRSontheinternalmigrationinChina?Itistheinterestofmanyresearchers,buttherestillnoseriousstudyonitsofar.Thegreatestdifficultytoanswerthisquestionisthatwedon’thaveameasureoftheStrictnessofHouseholdRegistrationSystem(SHRS).Inotherwords,thereisneithertimeseriesnorcrosssectiondataevaluatingthestrictnessofHouseholdRegistrationSystemofdifferentplaces.OnepossiblewaytogetameasureofSHRSistorefertothedocumentsofHRSpoliciesofdifferentperiodordifferentplaces.Forexample,differentplacesindifferenttimewouldhavedifferentstandardsforthegovernmenttograntalocalhukutotheapplicants.Unfortunatelyitisnotfeasible.ThepoliciesconcerningHRSwerenotmadebyasinglegovernmentdepartment,anddidn’thaveauniqueformatindifferentplaces.Itishardtosurveythedocumentsthoroughlyandtoevaluatethemproperly.Besides,themostsevereproblemofsuchawaytoevaluatetheSHRSisthatthethingsdejureisnotequaltothatdefacto.Thestandardsofgrantinglocalhukouinthedocumentsarenotequaltothestandardsinoperation.TheotherwaytoevaluatetheSHRSistoestimateitempirically,which,ofcourse,dependsonadatasetthatprovidesinformationaboutthechangesoftheindividual’sresidenceandhishukouplace.Unfortunately,theexistingdatasets,suchasthecensusdataofChinaandotherpopulationsurveys,onlyhaveinformationaboutchangesof2YinghuaHEindividual’sresidence.Asaresult,theempiricalwayisnearlyinfeasibleeither,sofar.ThispaperwillconstructaproxyforSHRS,whichisthelikelihoodforthegovernmenttograntaHukoutoacertainmigrant.UndertheHRS,amigrant’shukoustatus—holdingornotholdingalocalhukou,isjointlydeterminedbymigrantsandthegovernment.Themigrantwillhaveapropensitytoapplyforthelocalhukou,andatthesametime,thegovernmentwilldeterminewhethertogranthimalocalhukouornot.Thus,therearetwokindsofmigrants—hukouandnon-hukoumigrants.Ifthemigrantholdsalocalhukouathismigrationdestination,heisahukoumigrant;otherwise,whenhisresidenceplaceandhukouregistrationplacearenotthesame,heisanon-hukoumigrant.Whydoesthisclassificationofm