Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/58623
Authors: 
Afridi, Farzana
Li, Sherry Xin
Ren, Yufei
Year of Publication: 
2012
Series/Report no.: 
Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6417
Abstract: 
We conduct an experimental study to investigate the causal impact of social identity on individuals' response to economic incentives. We focus on China's household registration (hukou) system which favors urban residents and discriminates against rural residents in resource allocation. Our results indicate that making individuals' hukou status salient and public significantly reduces the performance of rural migrant students on an incentivized cognitive task by 10 percent, which leads to a significant leftward shift of their earnings distribution. The results demonstrate the impact of institutionally imposed social identity on individuals' intrinsic response to incentives, and consequently on widening income inequality.
Subjects: 
social identity
inequality
field experiment
hukou
China
JEL: 
C93
D03
O15
P36
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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