Migration and the Reshaping of Consumption Patterns

Lead Research Organisation: University of Southampton
Department Name: School of Social Sciences

Abstract

Internal migration in China has rapidly increased in the past thirty years. Fuelled by the reforms initiated at the end of 1970s, the largest move of labour force in history started taking place, with an enormous amount of individuals temporarily leaving rural areas to work in urban areas attracted by better economic conditions. Not only the Great Migration is an important aspect of the recent economic paradigm of China, but is also playing a crucial role in the international context. A large share of the global demand over the past decades has been sustained by the shift of the Chinese labour force out of the agricultural sector into the export-oriented manufacturing and tertiary sectors in urban areas. On parallel, international migration to Europe has been growing in the past twenty years, also triggered by increasing economic integration with developing countries. In particular the Chinese diaspora has been growing, with many young talented Chinese migrants moving to countries such as France, the UK and Germany to further their education in disciplines in which Europe typically has a scarce supply.
In this context, our proposed project aims at investigating how migration reshapes the consumption patterns of migrants and other individuals indirectly affected by migration, with particular attention to implications in terms of consumption inequality. Our focus is on both the Great Migration in China and the Chinese diaspora in the EU.
While there is a wealth of studies analysing the consequences of migration on labour market outcomes, systematic evidence is missing on how consumption, consumption behaviour and consumption inequality are affected by migration. We aim at filling this gap by answering the following three research questions:
a) What is the impact of the Great Migration on consumption patterns?
b) What are the relationships between institutions, population change and consumption behaviour?
c) Does migration lead to the transfer of consumption norms?
Research shows that consumption is an ideal measure for capturing permanent income and thus for predicting long-run economic well-being. In the first research question we focus on studying how migration affects consumption of migrants before, during and after migration, as well as consumption of individuals who are indirectly affected by migration (family left behind and urban residents).
With the ageing of the population and the shrinking of the working-age population in China many individuals will have to adapt their behaviour in terms of how much they can currently consume and how much should be saved for future consumption. Housing is a key asset that is expected to be affected by such a trade-off. Our second research question investigates what migration has to do with housing demand and housing prices, as well as how housing affects the consumption of remaining goods.
We devote the third research question to understand whether and how migration leads to a transfer of consumption norms from destination to sending areas. Migrant workers living in urban areas are increasingly exposed to the city life style, absorbing the consumption behaviour of urban residents. Similarly, many young Chinese migrants learn about European values and norms during their permanence, and such exposure is likely to determine a transfer of consumption behaviour back to China, channelled through the use of new technology, media and social networks.
The ultimate goal of our research is to inform policy about how migration can affect consumption behaviour and consumption inequality, so that disparities and social instability can be prevented, and consumption - to the extent that it promotes growth and increases well-being - can be fostered.

Planned Impact

Our project will focus on the role played by migration in changing consumption patterns and behaviour. It aims to highlight the role of various drivers, in addition to migration and demographics concerning consumption patterns and behaviour, potentially leading to inequality. The rising inequality in China is of a concern for the country's policy makers. At the same time, the changing patterns of Chinese consumption also hold importance for Europe and the rest of the world, with implications for world prices through increased demand for goods. Hence, our project will help shedding light on an important and policy relevant issue that has global relevance.
The findings from our project could be of potential use to several groups, including: (i) policy makers and planners, locally and nationally within China, since our research can suggest evidence-based policy prescriptions aimed at reducing inequality and increasing well-being; (ii) the third sector, especially charity and voluntary organisations, since our research can shed light on the role of migration on affecting altruistic behaviour; and (iii) international organisations, since our research can provide relevant insights for policy makers and planners concerned with migration and development policies.
In addition, our research is expected to directly benefit the following stakeholders: (iv) migrants and non-migrants in China, since our findings can have important policy implications for consumption inequality, ultimately contributing to improving their quality of life, health and well-being; (v) immigrants from China living abroad, and in particular student migrants, as our research can enhance the knowledge on the role played by migration in norm transfers relative to other channels such as social media and peer effects; (v) consumers worldwide, since our findings can suggest evidence-based policy to e.g. mitigate negative impacts from migration that result in higher prices; and (vi) the general public, since our research focus on the global challenges of migration and consumption can help to tackle the narrow and stereotyped European view of China, as well as providing a more informed picture of Europe and its values and culture among the Chinese public.
We have given careful consideration to the pathways to maximise the impact of the proposed project, both within China and internationally. We plan to engage with users and beneficiaries throughout the project's lifetime and beyond. We also plan to monitor the effectiveness of our impact activities to ensure the success of our engagement plan through keeping track of citations in non-academic and policy publications, interactions with policy makers and officials, the number of downloads of policy briefs, as well as invitations to expert meeting and talks.

Publications

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Akay A (2016) Remittances and relative concerns in rural China in China Economic Review

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Andrews M (2015) Do Foreign Workers Reduce Trade Barriers? Microeconomic Evidence in SSRN Electronic Journal

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Chabé-Ferret B (2018) Remigration intentions and migrants' behavior in Regional Science and Urban Economics

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DĂ©murger S (2016) Remittances and expenditure patterns of the left behinds in rural China in China Economic Review

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Facchini G (2015) Migration, Friendship Ties, and Cultural Assimilation in The Scandinavian Journal of Economics

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Facchini G (2015) Lobbying Expenditures on Migration: a Descriptive Analysis in CESifo Economic Studies

 
Title Online Chinese Students Survey 
Description Giulietti and Wahba have designed an online survey questionnaire comprises of 6 parts: a) meta module; b) consumption module; c) network module; d) migration module; e) module about preferences and satisfaction and f) module to elicit time preference and altruism. The survey will be administered to students in three partner Universities in China. We submitted the questionnaire to ethics committee, and it was approved on 9 February 2017 (Ethics ID: 25126). A pilot will be run in March 2017. 
Type Of Material Database/Collection of data 
Provided To Others? No  
Impact Not yet available 
 
Description China Research Centre 
Organisation University of Southampton
Department Faculty of Social, Human and Mathematical Sciences
Country United Kingdom of Great Britain & Northern Ireland (UK) 
Sector Academic/University 
PI Contribution Head the migration and labour market theme.
Collaborator Contribution Bring together researchers working on China- inter-disciplinary centre.
Impact multi-disciplinary collaboration
Start Year 2015
 
Description PERSPECTIVES ON GLOBAL DEVELOPMENT 2016: International migration in a shifting world, Second Expert Meeting 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact This meeting was discussing the OECD draft report on international migration. The discussion will shape the contents and drafting of the final report.
Year(s) Of Engagement Activity 2016