The Impact of Migration Controls on Urban Fiscal Policies and the Intergenerational Transmission of Human Capital in China

56 Pages Posted: 11 Sep 2020 Last revised: 13 May 2021

See all articles by Holger Sieg

Holger Sieg

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Chamna Yoon

Sungkyunkwan University

Jipeng Zhang

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management

Date Written: September 2020

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.

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Suggested Citation

Sieg, Holger and Yoon, Chamna and Zhang, Jipeng, The Impact of Migration Controls on Urban Fiscal Policies and the Intergenerational Transmission of Human Capital in China (September 2020). NBER Working Paper No. w27764, Available at SSRN: https://ssrn.com/abstract=3687920

Holger Sieg (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Chamna Yoon

Sungkyunkwan University ( email )

53 Myeongnyun-dong 3-ga Jongno-ju
Guro-gu
Seoul, 110-745
Korea, Republic of (South Korea)

Jipeng Zhang

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management ( email )

55 Guanghuacun Street
Chengdu, Sichuan 610074
China

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