Rural-Urban Migrants’ Citizenization: Public Services Cost Measurement and Economic Impact Analysis

Abstract

Rural-urban migrants’ citizenization is an important symbol of China's new urbanization. It not only leads to changes in the structure of labor factor and increases in the cost of public service, but also has an overall impact on the economic system. Unlike previous studies that focused purely on cost estimates, the authors of this paper have conducted empirical comparative analysis of rural-urban migrants’ citizenization from such two dimensions as costs and benefits. Relying on the panel data of each province of China from 2005 to 2013, measurements have been carried out, with results showing that, for every additional rural-urban migrant, government public service costs will increase by RMB 11,511 (or 11,511 yuan) accordingly. Based on LHR and Zhang Xin (2010)'s computable general equilibrium model, the authors have simulated the impact of rural-urban migrants’ citizenization on such economic variables as national economy, sectoral output, government revenue and individual income, etc. the simulation results show that, citizenization will bring tax revenue to grow, secondary and tertiary industries’ output to increase, and the country's economic growth and national Gini coefficient to decline. Based on the above empirical results, the authors believed that local governments should not simply perform rural-urban migrants’ citizenization as a political task or take one-sided account of the economic resources and public service costs, but should fully recognize the development opportunities brought about by citizenization. Moreover, all levels of governments should also pay attention to those farmers left behind in rural areas, and achieve equalized public services among urban residents, rural residents and rural-urban migrants in the premise of repaying the historical debt owed to “agriculture, rural areas and farmers”.