Access To Credit Across Households

Since the reform and opening up in 1978,China has experienced an increasing number of rural people migrating to urban area for better lives.They gradually realized the geographical transfer from rural to urban areas,the career transformation from farmers to workers,and the conversion of household registration from agriculture to non-agriculture.In this process,the migrant household is gradually divided into two categories:one is hukou migrants who have gained non-agriculture hukou due to economic development,administrative planning,urban expansion and land acquisition;the other is non-hukou migrants who are unable to obtain non-agriculture hukou.Along with the urbanization,researching on socio-economic issues of migrants has attracted the attention of policymakers and scholars.Studies have shown that compared with urban residents,migrants have less income and consumption,and their public participation is negative.In addition,the process of housing ownership rate of migrants has been delayed and the housing demand of the floating population has been suppressed.However,there is little known about their financial integration in China.It's well known that credit markets can facilitate the accumulation of human capital and physical capital,enhance the ability to adopt new technologies and promote class mobility.In particular,as for migrants,obtaining loans helps them to bear the migration costs and acquire more income and consumption.The credit demand of migrant families mainly includes migration costs,venture capital and consumption credit,which mainly improves their welfare through these three channels.Therefore,it is of great significant to seek evidence of the causal relationship between migration and the probability of receiving credit in a developing country.The socio-economic integration of migrant families is an important issue during China's economic transition.This paper analyzes the theoretical mechanisms of migration behaviors and hukou acquisition on credit acquisition.Based on the Heckman Probit model solving the estimation bias caused by the heterogeneity of credit demand,we utilize 2013 China Household Finance Survey(CHFS2013)data to empirically examine the differences in credit availability between migrant households and urban residents,hukou migrants and non-hukou migrants,as well as the influencing factors.In addition,taking into account the distinction in household registration is essentially the concrete manifestation of the difference in urban integration,and the difference in urban integration is the essential connotation of the existence of the household registration system.Therefore,we further explore the impact of urban integration on credit acquisition differences among groups.After the accurate identification of credit access,the main conclusions are follows:First of all,we find that migrants have higher credit demand than urban residents,but they have lower probability of acquiring credit under appropriate controlling of credit demand.Our study also shows that there is significant difference between the access to credit for hukou migrants and non-hukou migrants,which means that non-hukou migrants are subject to serious credit constraints.Our results point out migrant households holding less credit is likely due to migration across locations,which leads to information asymmetry.Meanwhile,under the background of conducting registration of rural migrants as permanent urban residents in an orderly way,the reform of the household registration system still lags behind,which may hinder human capital accumulation,impede the construction of social networks and intensify information asymmetry.Furthermore,hysteresis of the household institution reform exacerbates the conditions of non-hukou migrants,thus reducing their credit availability.Second,in terms of productive loans and consumer loans,both migration behavior and hukou acquisition have no effect on the access to productive loans,but migrant households show stronger credit demand in consumer credit,and they are subject to severe consumer credit constraints,while non-hukou migrants have the lowest probability of obtaining consumer credit.Based on the above findings,this paper believes that the convergence of performance among groups in the acquisition of productive loans is attributed to the changes in the production and lifestyle of migrant households living in cities,that is,they are increasingly integrated into urban residents and productive financing is no longer the main demand of this group.On the other hand,the heterogeneity of consumer credit indicates that the existing urban financial market underestimates the consumer credit demand of migrant households and lacks supporting financial products and services.This also means that compared with non-hukou migrants,hukou migrants have sufficient stability,motivation to maintain financial credit,and low financing risks.Finally,we examined the impact of urban integration on credit acquisition,and verified that the increase in integration helps to narrow the gap between households and urban families,but the gap between household registration and non-household immigration credits has widened,although the coefficient is not statistically significant.With the reform of the household registration system,some migrants acquire non-agricultural hukou.This not only promotes their social integration,but also gradually eliminates a series of system barriers related to the household registration system such as the employment system,education system,and social security system.Household registration immigrants are gradually equalizing the economic and social benefits of urban development.This has enabled hukou migrants to equally obtain the economic and social benefits of urban development.However,for non-hukou migrants,the current reform of the household registration system in China still lags behind urbanization development and the needs of the floating population,which may lead to an ever-increasing disparity in the integration of hukou migrants and non-hukou migrants,and it will also cause their social differentiation in economic,social,and cultural aspects.