What keeps China's migrant workers going? Expectations and happiness among China's floating population

Abstract

China's rural-urban migrants have been the engine room that has driven China's high rate of economic growth; however, their living and working conditions are poor. This paper addresses the question: What keeps China's migrant workers going? We seek to answer this question through examining the determinants of the happiness of China's rural-urban migrants, drawing on a large-scale survey administered across 12 cities in 2005. We find that expectations as to future income are important determinants of happiness. This suggests that many migrants expect their financial position and, by extension, their lives more generally to get better in the future and that this is having a positive effect on their current levels of happiness. The effect of optimistic expectations outstrips any realistic increase in their own income. We find that for those who expect a big increase in income over the next five years, this translates to an increase of 380% in average monthly income and for those who expect a small increase in income over the next five years, this translates to an increase of 200% in average monthly income to obtain an equivalent increase in happiness compared with those who expect no change in income. This finding has important implications for economic growth and socio-economic stability in China, given that maintaining socio-economic stability is important to maintain China's high rate of economic growth and positive expectations about future income are important for maintaining socio-economic stability during times of economic transition.