The Myth of Hukou: Re

The hukou system is typically treated as an institutional base for rural-urban chasm in the literature regarding internal migration in China. However, these works rarely separate hukou’s social impacts from those caused by the changes in the economic system itself. With a review of historical policy documents, data on migration from rural to urban sectors, agricultural output and industrial output growth, I argue that hukou is in fact a rather neutral and passive legislation in the sense that it can perform opposite functions depending on the particular economic system it is operating under. This paper calls for bringing the concept of economic system back to the center of the discussion regarding development models. JEL Classification: O15, D6