Credential Without Capital: Positive Selection in the Returns to Hukou Conversion among Rural-to-Urban Migrants in China

• In Event: Inequality, Poverty, and Mobility Section Roundtables
  In Refereed Roundtable (60 minute): 1. Perspectives on Inequality in China

Abstract

China’s household registration (hukou) system is characterized as a “master status” that drives urban inequality. Yet existing studies estimate only average returns to conversion, leaving unanswered a critical question: who benefits from acquiring urban hukou? Using longitudinal data from the China Family Panel Studies, I apply the heterogeneous treatment effects (HTE) framework to test whether income returns to hukou conversion are positively or negatively selected. I find income returns are positively selected: only high-propensity migrants, those already equipped with college education, party membership, and other advantages, gain a significant premium from conversion, while low-propensity migrants gain almost nothing. Then, this pattern directly contradicts the negative selection found for college education (Brand and Xie 2010), revealing a fundamental distinction between market credentials that substitute for missing capital and institutional credentials that require complementary capital to activate. I argue that hukou operates not as an independent stratifying force but as a mechanism of cumulative advantage, amplifying pre-existing inequalities in human capital, gender, and political connections. These findings have implications for stratification theory and for evaluating the likely distributional consequences of hukou reform.

Author

• Mingze Li, University of Washington