Living standards inequality between migrants and local residents in urban china-a quantile decomposition

Abstract

This study investigates the inequality in per-capita consumption expenditure between urban and rural-to-urban migrant households in China using Rural-Urban Migration in China (RUMiC) data. The methodology used is that of Oaxaca-Blinder and unconditional quantile decompositions and we deal with selection related to education level using matching. It is found that the characteristics effect does not contribute toward explaining any of the gaps in consumption. Results from a detailed decomposition suggest that differences in educational level account for 8%–19% of the overall inequality after taking selectivity of education into consideration. Differences in household size and region of residence are also important in narrowing expenditure inequality between the two groups. (JEL R23, C15)