Remittances and Relative Concerns in Rural China

Arbeitspapier

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 well-being functions to simultaneously explore the relative concerns with respect to income and remittances. Our results show that although rural households experience substantial utility loss due to income comparisons, they gain utility 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" with respect to remittances. The magnitudes of these two opposite effects are very similar, implying that the utility reduction due to relative income is compensated by the utility gain due to relative remittances. This finding is robust to various specifications, controlling for the endogeneity of remittances and selective migration, as well as a measure of current migrants' net remittances calculated using counterfactual income and expenditures.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 9163

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: General ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement
• Subject: positional concerns ; remittances ; subjective well-being

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Akay, Alpaslan ; Bargain, Olivier ; Giulietti, Corrado ; Robalino, Juan David ; Zimmermann, Klaus F.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/114043
• Last update: 10.03.2025, 11:43 AM CET