Formal and informal debt in China: Evidence from the 2014 hukou reform

Lei Xu; Massimiliano Tani; Yu Zhu; Xin Wen

doi:10.1016/j.ememar.2025.101367

Formal and informal debt in China: Evidence from the 2014 hukou reform

Lei Xu
, Massimiliano Tani
, Yu Zhu
, Xin Wen (Lead / Corresponding author)

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

104 Downloads (Pure)

Abstract

We investigate the impact of China’s 2014 hukou reform - a major change allowing migrants living in small and medium-sized cities of less than 5 million people to apply for urban residence - on formal and informal borrowing at a time of rapid economic transformation. We find that the hukou policy change has predominantly increased natives’ access to finance, especially through informal sources, and for investments in housing. We also find that the policy affects households differently according to education level, with more educated households borrowing more to capitalise on rising asset prices driven by the ‘additional’ urban population created by the policy.

Original language	English
Article number	101367
Number of pages	14
Journal	Emerging Markets Review
Volume	69
Early online date	23 Sept 2025
DOIs	https://doi.org/10.1016/j.ememar.2025.101367
Publication status	Published - Nov 2025

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 10 Reduced Inequalities
SDG 11 Sustainable Cities and Communities

Keywords

hukou reform
formal and informal debt
migrants
Hukou reform
Migrants
Formal and informal debt

ASJC Scopus subject areas

Business and International Management
Economics and Econometrics

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10.1016/j.ememar.2025.101367Licence: CC BY

Final Published VersionFinal published version, 1.58 MBLicence: CC BY

Cite this

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title = "Formal and informal debt in China: Evidence from the 2014 hukou reform",

abstract = "We investigate the impact of China{\textquoteright}s 2014 hukou reform - a major change allowing migrants living in small and medium-sized cities of less than 5 million people to apply for urban residence - on formal and informal borrowing at a time of rapid economic transformation. We find that the hukou policy change has predominantly increased natives{\textquoteright} access to finance, especially through informal sources, and for investments in housing. We also find that the policy affects households differently according to education level, with more educated households borrowing more to capitalise on rising asset prices driven by the {\textquoteleft}additional{\textquoteright} urban population created by the policy.",

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AU - Tani, Massimiliano

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AU - Wen, Xin

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N2 - We investigate the impact of China’s 2014 hukou reform - a major change allowing migrants living in small and medium-sized cities of less than 5 million people to apply for urban residence - on formal and informal borrowing at a time of rapid economic transformation. We find that the hukou policy change has predominantly increased natives’ access to finance, especially through informal sources, and for investments in housing. We also find that the policy affects households differently according to education level, with more educated households borrowing more to capitalise on rising asset prices driven by the ‘additional’ urban population created by the policy.

AB - We investigate the impact of China’s 2014 hukou reform - a major change allowing migrants living in small and medium-sized cities of less than 5 million people to apply for urban residence - on formal and informal borrowing at a time of rapid economic transformation. We find that the hukou policy change has predominantly increased natives’ access to finance, especially through informal sources, and for investments in housing. We also find that the policy affects households differently according to education level, with more educated households borrowing more to capitalise on rising asset prices driven by the ‘additional’ urban population created by the policy.

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KW - migrants

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KW - Migrants

KW - Formal and informal debt

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JF - Emerging Markets Review

M1 - 101367

ER -

Formal and informal debt in China: Evidence from the 2014 hukou reform

Abstract

UN SDGs

Keywords

ASJC Scopus subject areas

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