The impact of China's residence permit system on the floating population's willingness to settle in cities

Abstract

China's residence permit system is the focus of the nation's household registration system reform and a crucial aspect of promoting the new people-centered urbanization. Based on the China Migrants Dynamic Survey, this study uses the probit regression model to investigate the impact of the residence permit system on the floating population's willingness to settle in cities and examines the moderating effect of local government's financial resources. The results show that the residence permit system has a significant promoting effect on the migrants’ willingness to settle. And local government financial resources can strengthen the effect of the residence permit system on the willingness to settle. Additional exploration shows that the residence permit system can enhance the willingness of floating populations to settle in urban areas by increasing their income and consumption levels. Heterogeneity analysis shows that for non-agricultural household registration, high-education, high-income, and interprovincial migrating groups, the incentive effect of the residence permit system is more stronger. Based on the findings, while improving the residence permit system and expanding its coverage groups, transfer payments from the central government to local governments should be increased to effectively improve the value of residence permits, promote the floating population's settlement in cities, and advance China's new urbanization.