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Department of Economics
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Seminar on "A Simple Model of the Chinese Hukou System and Some Ongoing Reforms"

Speaker Professor ZHAO Laixun, Lex
Professor
Research Institute for Economics and
Business Administrative
Kobe University
Date 28 February 2018 (Wednesday)
Time 2:00pm – 3:30pm
Venue LBYG06, G/F, B.Y.Lee Building

Abstract

We model the Chinese hukou (household registration) system, from the Mao era when it was strictly enforced to the reform era (Deng Xiaoping era) when peasants were allowed to migrate to cities for work only. We document some stylized characteristics of hukou control, and based on which build a rigorous model of the dual labor market generated by it. The model can explain two key features of the hukou system: the urban-rural divide and the urban-urban divide, and the fact that rural migrant workers not only made important contributions to China's export boom, but also changed the Chinese export pattern. We show that reform recovers some of the deadweight losses from Mao’s strict hukou control, but the gains from reform are unevenly distributed. We also apply the model to examine the impacts of various policies and some ongoing reforms such as special economic zones, export-tax refund, urbanization, one-child policy, regional inequality, etc.

Biography

Prof Lex (Laixun) Zhao is a professor of economics at Kobe University. His main research field is international economics. His research papers are published in such journals as Journal of International Economics, Journal of Labor Economics and Journal of Environmental Economics and Management.