1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Urbanisation and household consumption in China

This paper focusses on the link between urbanisation and consumption behaviour in China. Urbanisation is defined here as rural people moving to cities to work and migrant workers in cities obtaining urban residential status, against the backdrop of government plans to settle 100 million rural dwellers into cities and grant urban residential status to another 100 million migrant workers who already reside in cities. Using household data of the China Family Panel Studies dataset, the paper investigates the impact of those residential status changes on household consumption. The results of the analysis suggest that moving up the residential ladder in this way will likely result in increased consumption by almost 30% for both groups of people and thus contribute to rebalancing of the economy. Higher incomes and longer times in education are important drivers of this process, while a greater number of children in the family discourages consumption.

This Working Paper relates to the 2017 OECD Economic Survey of China (www.oecd.org/eco/surveys/economic-survey-china.htm).

English

Keywords: residential status, consumption, migrant workers, urbanisation, rebalancing
JEL: P23: Economic Systems / Socialist Systems and Transitional Economies / Socialist Systems and Transitional Economies: Factor and Product Markets; Industry Studies; Population; J61: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Geographic Labor Mobility; Immigrant Workers; E21: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Macroeconomics: Consumption; Saving; Wealth; P25: Economic Systems / Socialist Systems and Transitional Economies / Socialist Systems and Transitional Economies: Urban, Rural, and Regional Economics
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