Does Local Citizenship Still Matter? The Impact of Hukou Locality on the Employment of Relocated Households from the Perspective of Welfare Acquisition Cost

Abstract

Rural-to-urban resettlement is a widely used poverty alleviation strategy in China for fundamentally transforming poor farmers’ livelihoods, with roughly 263,000 rural poor relocated to urban communities in Liangshan Yi Autonomous Prefecture between 2016 and 2020. This dramatic development intervention in urbanization has unexpectedly resulted in the separation of hukou locality and residence. Considering that the government equally provides follow-up employment support policies to guarantee the citizenship rights for resettlers whether or not their hukou locality has transferred to urban communities, then, does the local citizenship still matter for employment? If so, how does local citizenship make a difference? What role does employment policy play in terms of the impact of local citizenship on employment? The answers to these questions are not yet clear. Based on a survey of 735 relocated households in the Liangshan Yi Ethnic Area, the Heckman sample selection model was used to empirically estimate the effect of local citizenship (hukou locality) on employment from the perspective of welfare acquisition cost, paying particular attention to the moderating effect of follow-up employment support policies. Our results show that (1) local citizenship can significantly increase the employed persons of a household by 0.279 units, prolong the working months by 2.297 units, and increase per capita wage by 0.885%. (2) Mechanism analysis shows that local citizenship affects relocated households’ employment by reducing welfare acquisition costs. (3) Moderating analysis shows that the follow-up employment support policies weakened the positive impact of local citizenship on employment, developing pro-poor jobs substitutes for the positive effect of local citizenship on the employed size; recommending job information substitutes for the positive effect of local citizenship on working months; and targeted labor exporting substitutes for the positive effect of local citizenship on per capita wage. This study provides new empirical evidence for understanding the relationship between hukou locality and employment consequences at a smaller scale and then provides theoretical reference and practical basis for the improvement of employment from the perspective of local citizenship.