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Title:Where did all the remittances go? Understanding the impact of remittances on consumption patterns in rural China PDF Logo
Authors:Zhu, Yu
Wu, Zhongmin
Peng, Liquan
Sheng, Laiyun
Issue Date:2009
Series/Report no.:School of Economics discussion papers 09,07
Abstract:We focus on the impact of migrants' remittances on consumption patterns in rural China, allowing for endogeneity of remittances and county fixed-effects. We find that the marginal propensity to consume out of remittances is close to unity, which is far greater than that out of non-migrant earnings or farm income. These findings imply that rural households take remittances as permanent income and are consistent with the prevalence of circular and repeat migration which is largely caused by the combination of the restrictive hukou (household registration) system and the rigid land tenure system in China.
Subjects:rural-urban migration
remittances
consumption patterns
fixed-effect instrumental-variables estimation
JEL:D12
D13
J61
R23
Document Type:Working Paper
Appears in Collections:School of Economics Discussion Papers, University of Kent

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