Household Registration Identity With The Residents' Happiness

In the background of high-paced economic growth and rapid urbanization in China, social segmentation in cities generated by Household Registration (Hukou) system is gaining more and more attention from Chinese and foreign economists. This paper aims to address what impacts social segmentation based on Hukou System has from the perspective of happiness. Using household survey in Shanghai, this article empirically analyzes determinants of residents'happiness, especially those economic factors on the community level. This research finds that community average income positively affects residents' happiness, and the effect is larger for old, low-educated and poor people. Besides, a more important discovery is that income gap between richer people in the community and the individual has a positive effect on one's happiness. Further investigation shows that the influence of education on income gap's impact differs between local residents and migrants. For well-educated local residents and low-educated migrants, income gap in the community has positive effects on happiness, while for low-educated local residents and well-educated migrants, income gap negatively influences happiness. Urban labor-market segmentation may result in the phenomena above.