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Remittances and relative concerns in rural China

Author

Listed:
  • Akay, Alpaslan
  • Bargain, Olivier B.
  • Giulietti, Corrado
  • Robalino, Juan D.
  • Zimmermann, Klaus F.
Abstract
The paper investigates the impact of remittances on the relative concerns of households in rural China. Using the Rural to Urban Migration in China (RUMiC) dataset we estimate a series of subjective well-being functions to simultaneously explore relative concerns with respect to income and remittances. Our results show that although rural households experience substantial welfare loss due to income comparisons, they gain well-being by comparing their remittances with those received by their reference group. In other words, we find evidence of a “status effect” with respect to income and of a “signal effect” of similar magnitude with respect to remittances. This finding is robust to various specifications, alternative reference group definitions, controls for the endogeneity of remittances and selective migration, as well as the use of migrants' net contribution to household income.

Suggested Citation

  • Akay, Alpaslan & Bargain, Olivier B. & Giulietti, Corrado & Robalino, Juan D. & Zimmermann, Klaus F., 2016. "Remittances and relative concerns in rural China," China Economic Review, Elsevier, vol. 37(C), pages 191-207.
    • Handle: RePEc:eee:chieco:v:37:y:2016:i:c:p:191-207
    DOI: 10.1016/j.chieco.2015.12.006
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    2. Sihong Xiong & Ya Wu & Shihai Wu & Fang Chen & Jianzhong Yan, 2020. "Determinants of migration decision-making for rural households: a case study in Chongqing, China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 104(2), pages 1623-1639, November.
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    7. Tani, Massimiliano, 2015. "Hukou Changes and Subjective Well-Being," IZA Discussion Papers 9451, Institute of Labor Economics (IZA).
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    More about this item

    Keywords

    Positional concerns; Remittances; Subjective well-being;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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