Hukou type, hukou place, and labour market vulnerability in Chinese megacities: The case of Beijing in the pandemic

The household registration (hukou) system in China serves as a means of resource allocation among its population and affects the lives of Chinese people. During China’s economic boom, it affected the extent to which one can benefit from the buoyant job market. However, the COVID-19 pandemic and ensuing economic downturn have tightened the country’s job market. This shift gives rise to a crucial enquiry that needs to be addressed to provide a more comprehensive understanding of the hukou system’s impacts, and to empower Chinese policymakers to make targeted interventions: How does the hukou system affect individuals’ vulnerability in the labour market?

The hukou system operates along two distinct dimensions: The hukou type (urban/rural) and the hukou place (local/non-local). While these two dimensions are widely recognised, their individual impacts on people’s lives have rarely been disentangled, leading to an oversimplified understanding of the hukou system’s impacts. Additionally, to estimate the impacts, individuals with local urban hukou, rather than individuals who have acquired local urban hukou (‘naturalised’ locals) are often taken as the reference group with which non-locals are compared, leading to biased estimations of these impacts. These gaps impede a more nuanced and accurate understanding of how the hukou system affects the lives of Chinese people.

Our recent study aims to address these gaps and enrich our understanding of the hukou system’s impacts. We used pandemic-induced income loss experienced by the workforce in Beijing as a case study to examine the role of the hukou system in shaping labour market vulnerability; we collected data on this income loss, hukou place, hukou type and hukou acquisition on 3028 residents in Beijing; we compared this income loss between people with different hukou statuses including naturalised locals; and we estimated the effects of hukou place, hukou type and hukou acquisition on this income loss.

We found that while the hukou system played a role in shaping pandemic-induced income losses, its impact was achieved mainly through the hukou place, with the hukou type having no significant effect. Compared with locals, non-local hukou holders in Beijing were more susceptible to pandemic-induced income loss, and their income losses were severer. Locals and non-locals were also subject to different rules when deciding which individuals in the group would face pay cuts, with personal attributes playing a significant role in this decision for non-locals but not for locals.

Our study broadens the discussion of the hukou system to the issue of labour market vulnerability, which is a crucial aspect especially considering the ongoing and potentially prolonged weakness in China’s labour market. It reveals the multifaceted nature of hukou and highlights the importance of using naturalised locals as a more appropriate benchmark for evaluating the impacts of the hukou system. We hope that our study could move hukou research to a new phase that attends to the intricate interplay between hukou type and place when evaluating the impacts of the hukou system on the lives of Chinese people.

Read the full paper on Urban Studies OnlineFirst here.