China's Hukou System and Internal Migration

How China's household registration system ties people's access to public services to their place of origin, and its effects on migrant workers.

China’s economic rise involved one of the largest migrations in human history, as hundreds of millions of people moved from villages to cities to work in factories, construction and services. Yet many of them have lived as second-class residents in the cities they helped build, because of the hukou system.

What hukou is

The hukou is a household registration system introduced in the 1950s. Every citizen is registered as belonging to a particular place and classified as rural or urban. Historically, access to many public services, such as schooling for children, health insurance, pensions and subsidised housing, depended on one’s hukou location.

Migrant workers

When China’s economy opened up from the late 1970s, restrictions on moving eased, and rural people flooded into cities for work. But many could not transfer their hukou. China’s National Bureau of Statistics counts close to 300 million migrant workers, rural hukou holders working away from their home area or in non-farm jobs.

Because their hukou remained rural, many migrants could not easily enrol their children in city public schools or access urban health and pension benefits. Millions of children, known as left-behind children, stayed in villages with grandparents while parents worked in distant cities.

A factory worker's dilemma

A young woman from a village in Sichuan works in a factory in Guangdong. Her wages are far higher than she could earn at home. But her child cannot easily attend a public school in the city, so the child lives with grandparents hundreds of kilometres away. She sees her child once a year at the Lunar New Year. The hukou system shapes her family life as much as her work.

Economic effects

Economists argue hukou has had mixed effects. It may have slowed the growth of slums by limiting permanent settlement. But it also:

Reduced migrants’ consumption, since they saved heavily without social protection.
Limited labour mobility and the efficient matching of workers to jobs.
Deepened inequality between urban and rural residents.

Reforms

China has gradually loosened hukou rules, especially in small and medium cities, and set targets for granting urban hukou to more migrants. The largest cities, such as Beijing and Shanghai, remain restrictive. Full reform would be costly because cities would need to provide more services, but many economists see it as key to raising consumption and productivity.

Thinking China's urbanisation is complete

A majority of China's population now lives in cities, but a large share of urban residents do not hold urban hukou. Counting people by where they live overstates how fully integrated they are into urban life and services.

Key takeaways

The hukou system registers people to a place and ties public services to it.
China has close to 300 million migrant workers, many without urban hukou.
Hukou has limited migrants' access to schools and benefits, creating left-behind children.
Gradual reforms are loosening hukou, but the biggest cities remain restrictive.