Does informal homeownership reshape skilled migrants’ settlement intention? Evidence from Beijing and Shenzhen

Abstract

The aggressive industrial upgrade in China's first-tier cities has caused a shift in scholarly attention from peasant migrant workers to skilled migrants. Contrasting with a few elite migrants who are entitled special settlement policies, there is a large group of skilled migrants struggling for permanent homes and settlement amidst the rapid property inflation in the first-tier cities. However, these new floaters' housing experiences and settlement intention have not been studied. This paper fills this gap with a specific focus on skilled migrants' initiatives in expanding access to homeownership from the informal sector and showing how informal homeownership reshapes their settlement intention. Using a structural equation model on a dataset collected from Beijing and Shenzhen, this paper reveals the sorting and enabling effects of informal homeownership (small property rights housing, SPRH) on skilled migrants' settlement intention. The modelling results showed skilled migrants with an intention to settle down in Beijing/Shenzhen tend to buy an informal house as a residence instead of renting a home. Living in owned SPRH encourages migrants' intention to settle down because informal homeownership enables them to offset their structural disadvantages in the formal housing system. Therefore, SPRH serves as a stepping-stone for skilled migrants towards formal homeownership and permanent settlement in China's first-tier cities. Our empirical findings substantiate the socially inclusive nature of SPRH and contributes a new justification to tenure pluralism.