Urban-rural differences in social policies: the case of the hukou system in China

In the 1950s the People’s Republic of China introduced a household registration system to keep under control the internal migration from rural to urban areas. This registration system is called hukou system. All Chinese citizens are classified as either urban or rural hukou holders with limited possibilities of changing their status. Having an urban or rural hukou is a key determinant of the quality of the social policies provided to citizens. Social policies designed for urban hukou holders are based on the availability of higher levels of economic resources. There is a wide literature showing that China presents stark differences between rural and urban areas in well-being indicators and these differences always suggest better quality of life in urban areas. This chapter contributes to the literature that investigates the determinants of these differentials by documenting the different social policies individuals with rural and urban hukou have been eligible to since the hukou system introduction. We will offer an overview of the main features of the social policy schemes with respect to education, health care, income protection, housing and pensions that are designed for rural and urban individuals.