Self-Deprecation or Self-Sufficient? Discrimination and Income Aspirations in Urban Labour Market Sustainable Development

Abstract

This research contributes to previous studies through exploring the association between individual psychological aspirations and hukou discrimination in the Chinese urban labour market. Applying data from the 2010 China General Social Survey, we divided the sample into local hukou residents and non-local migrants (includes urban-urban migrants and rural-urban migrants). We then examined the relationship between these sub-categories with different hukou status and their income aspirations (i.e., expected wage levels). The estimated results suggest that, in comparison with urban-urban migrants, rural-urban migrants are more likely to self-deprecate. Discrimination against rural-urban migrants significantly restricts their income aspirations. These findings imply that it is urgent to eliminate these negative impacts caused by hukou discrimination in the Chinese urban labour market, and understanding the structure of labour force quality such as psychological condition appears to be important in determining the long-term sustainable development of labour market. Theoretical and empirical implications, limitations and further research directions are also discussed.

1. Introduction

Since the “13th Five-Year”, the reform of labour market has entered a new historical period in China. Being entrusted with the high-quality development and improvements in people’s living standards of the dual mandate, the development and perfection of labour market has become an important component of sustainable economic development. However, hukou discrimination distorts the labour market and results in substantial waste of human resources. This paper aims to understand how the hukou status distorts the labour market through affecting labourers’ psychological status, which in turn influences their performances and income aspirations that are crucial in determining the sustainable development of labour market and economy. The household registration system divides the Chinese people into rural hukou and urban hukou populations, which has created a dual economic structure. Originally, this system restricted labour migration and eliminated rural hukou populations’ civil rights of to welfare entitlements. As a result, this dualistic hukou system has constructed an obstacle between rural hukou individuals and urban hukou residents, bringing with it a degree of unequal treatment and discrimination against rural hukou individuals in this society. Although the hukou system has been reformed more recently and the limitations on labour migration relaxed at the end of the 1970s [1], most rural hukou migrants (i.e., rural-urban migrants) in the urban labour market still experience discrimination, and their occupational opportunities are most likely to be limited to lower-skilled occupations, which also brings lower incomes, typically with no access to social welfare. In addition, due to the unequal economic development of different urban cities in China, an increasing number of urban hukou individuals have chosen to leave their hometown and migrate to metropolitans with better economic development. Due to the saturated population in some metropolises, some social activities (e.g., buying a house and children’s education) are restricted for non-local hukou holders [2,3,4]. Such inconvenience has led some companies to prioritise local people while recruiting new staff because they are afraid of the significant liquidity of these migrant populations, considering that non-local migrants will not remain in these jobs over the long-term. Therefore, even if some migrants hold urban hukou status, they may be treated unequally because of their non-local hukou status, while looking for a job in a non-local urban city. Such unfair treatment, alone with the rural-urban migrant discrimination, is likely to create a sense of passivity and apathy [5,6], which in turn reduces the devalued group’s passion and motivation for work [7]. Following the human capital model, an individual’s motivation, aspiration, ambition and efforts as unobserved elements have a close association with their performance and achievements. The passive attitudes and activity derived from discrimination may decrease workers’ contributions to social productivity and economic sustainable development [6,7].

Regarding the psychological interferences of hukou discrimination on human’s performance and sustainable development in labour market, a large body of studies have explored this relationship from psychological perspective, and also propose an intermediate variable, i.e., aspiration which links discrimination and human capital’s performance. In terms of the linkage between discrimination and individual aspirations, one of the most influential theories that may explain the causal mechanism behind this relationship is the Social Cognitive Career Theory (SCCT), which states that contextual factors, such as racial background and gender, may promote or impede one’s career development by affecting one’s confidence regarding capabilities (self-efficacy) [8,9,10,11]. In other words, persons who suffer from discrimination in terms of their gender or racial background may undervalue their capabilities while taking part in particular tasks; thus, lower achievement targets and less aspirations of attractive outcomes will be established.

Based on SCCT, investigations regarding racial discrimination and career aspirations have been especially popular in the North American context [5,6,8,12,13]. This strand of literature claims that individuals who are vulnerable to discrimination suffer from possibly unobserved obstacles in setting their career goals. This sensitivity to barriers and discrimination can influence an individual’s cognition and experiences. Such feelings and devalued experience of people who are discriminated against may confine their utilisation of existing resources and their interest in areas of study and work that may be valuable to the career development. As a result, a disadvantaged individual is more likely to face difficulties when conducting evaluations on career choice, which in turn, limits their aspirations. Since the devalued persons do not have great ambition or higher aspiration for their own future prospects, they are also less likely to continue to invest in their human capital. Specifically, such lower ambitions and aspirations derived from being discriminated against restrict these devalued individuals’ desire for further job training and continuous education which can provide more opportunities for better career choice and job promotion [14]. Therefore, such passive psychology and behaviour will in turn restrain these disadvantage people’s performance, achievement and their prospective career development [6]. The gap between the vulnerable group (disadvantaged group) and their counterpart (advantaged group) will increase correspondingly, which negatively influences the economic sustainable development of whole society [7,15].

However, there are several gaps in the existing Chinese literature. First, although there are lots of Chinese literatures related to hukou discrimination, most of them explored the impact of hukou discrimination in terms of income inequality, occupational segregation, well-being and social stability. Fewer studies have considered the negative impacts of discrimination on human capital from psychological perspective, which has further influenced the rational utilisation of human resource and the human and economic sustainable development. Second, even though many Chinese studies have investigated economic sustainable development, most of them explored economic development in terms of ecology, environment, renewable resource and so forth [15,16,17,18]. Few Chinese research explored how human and economic sustainability could be maintained from the psychological perspective mentioned above. Finally, there is also a limited amount of Chinese literature explored the relationship between individuals’ aspirations and subjective well-being, and also described the determinants of aspirations in terms of present income, socio-demographic factors, self-evaluated socioeconomic status (SES) [19,20]. A lack of clarity still exists in explaining the connection between unfair treatments and labour’s psychological aspirations. Particularly, the potential relationship between institutional factors such as the presence of hukou system and personal aspirations have essentially been ignored.

In addressing these shortcomings, the present study extends the existing research scope through considering how hukou discrimination is associated with disadvantaged people’s aspirations (including both rural hukou (rural-urban) migrants in urban labour market and urban hukou migrants (urban-urban) in the non-local urban city). Particularly, we seek appropriate answers to these questions: (1) Comparing local residents with all migrants, does non-local hukou status restrict migrants’ aspirations? (2) Among all the migrants (including urban-urban migrants and rural-urban migrants), does rural hukou status have a negative association with rural-urban migrants’ aspirations? Based on previous studies conducted on aspirations from the perspective of income [19,21,22,23,24], we collected data from the 2010 China General Social Survey and explicitly modelled the income aspiration of respondents as a function of hukou status and a series of socioeconomic factors. The findings suggest that rural-urban migrants are more likely to self-deprecate, and that the discrimination against these rural hukou migrants significantly restricted their income aspirations, compared to urban hukou migrants (urban-urban) in non-local urban cities. This study provides four main contributions to the previous literature. First, empirical research on the relationship between discrimination and aspiration in China is insufficient. This study fills the gap in the Chinese literature and provides suggestions for engendering disadvantaged group’s occupational and income empowerment. Second, from the psychological perspective, this study theoretically links China’ hukou discrimination, personal aspirations, personal human sustainable development and economic sustainable development of China. Third, urban-urban migrants, a group that is more likely to be neglected, is also taken into account in this study. Fourth, the pursuit of career development includes various aspects, such as income aspiration, leadership position, comfortable working environment, continued training opportunities, welfare, realisation of life values and so forth. However, income aspiration as an indispensable factor in career pursuits is rarely explored concerning its association with discrimination. Hence, this study provides a more comprehensive framework for investigating the relationship between income aspirations and hukou discrimination in the Chinese urban labour market.

2. Methodology

2.1. Theoretical Framework

The main purpose of this study is to investigate how the hukou discrimination interferes with individuals’ psychological attitudes, which in turn distorts the Chinese urban labour market and then influences the sustainable development of human and economy. The theoretical framework is to establish a causal relationship to explain how the hukou discrimination influences sustainability step by step from a psychological perspective. In general, this theoretical framework is based on Social Cognitive Career Theory (SCCT) and human capital theory, which is shown in Figure 1. Then, a detailed description of the relationship between each factor in the framework will be provided as follows.

2.1.1. Influence Mechanism between Discrimination, Individual Aspiration and Performance

In this subsection, we will primarily illustrate how the hukou discrimination influences human performance by interfering their psychological aspirations or ambitions. The relationship between aspirations or ambitions and hukou discrimination in Chinese labour market was based on Social Cognitive Career Theory (SCCT) and its related literature, which relies on SCCT to explore the association between racial discrimination and African American’s aspirations [8]. SCCT provides a comprehensive understanding of how three aspects- (1) occupational interest establishment; (2) career performance and achievement; (3) occupational choice behaviour-interact with each other to determine individual career development [9,10,11]. Three interacting variables, i.e., self-efficacy belief, outcome expectations and personal goals, provide the basic blocks of SCCT, which has been shown in Figure 1.

Self-efficacy, which means personal confidence, indicates individuals’ self-assessment of their capabilities for specific task and activity [25]. This self-evaluation by an individua of their capabilities (self-efficacy) depends on individuals’ previous attainments, working experience and affective status. Regarding the importance of self-efficacy, it contributes to career development by influencing individual occupational selection, resilience to setbacks, thinking methods, thinking angles, effort expenditure and perseverance [9,10,11]. Unlike global confidence, self-efficacy is not a constant influential factor on career development but varies between different activities, tasks, occupations and circumstances [10]. Specifically, an individual may respond with greater self-efficacy beliefs in maths but lower confidence in sociability; thereby he/she is also more likely to obtain more attractive achievements in this skilled expert area, i.e., maths.

Outcome expectation refers to an individual’s faith in terms of the probable outcomes of participating in one specific task or activity (i.e., what will happen if I participate in this particular task?) [11,25]. In general, individuals are most likely to draw on advantages and avoid disadvantages; consequently, most people prefer to take part in the activities with greater rewards and more attractive welfare profits. Nevertheless, one’s occupational behaviours, such as participating in particular activities, effort expense and perseverance in confronting setbacks are influenced by their assessment of self-efficacy and potential outcome expectations simultaneously [25]. In comparison, self-efficacy has a greater contribution to one’s career behaviour. Specifically, although an individual has an awareness that one task or activity will bring more attractive benefits, he/she will avoid participating in such activity due to a relative lack of confidence in a specific area.

Personal goals, one’s decision to take part in one specific task for obtaining certain achievements, are likely to help individuals to direct their performance effectively and persevere in the pursuit of particular goals, despite facing barriers. Following SCCT, self-efficacy, outcome expectations and personal goals do not exist independently but closely interact with each other. To be specific, the establishment of one’s personal goal is based on their evaluation of capabilities and potential outcomes from particular tasks. Conversely, the achievement of personal goals inversely contributes to and adjusts one’s assessment of abilities and outcome expectations, to some extent.

Self-efficacy belief, outcome expectations and personal goals play an essential role in the SCCT model to determine an individual’s development through an occupational interest, choice-making and performance achievement model as shown in Figure 1 [11]. Personal choice goals are more likely to be influenced by self-efficacy, outcome expectations and some external environmental variables. Individuals’ performance attainment is closely related to both ability and career motivation [26]. Holding personal ability constant, people with higher self-efficacy (higher confidence) and more attractive outcome expectations are most likely to have higher aspirations for career development which in turn stimulate them to establish a higher personal goal in terms of income, position, type of work and so forth. As a result, people with higher self-efficacy tend to take more positive actions, such as employing their abilities and skills most efficiently and sustaining their efforts to overcome barriers for longer [26,27]. These three factors, i.e., self-efficacy belief, outcome expectations and personal goals, help individuals to make better utilisation of their capabilities.

A significant body of research has investigated the underlying mechanism between workers’ psychological attitudes and associated market outcomes. Some contextual determinants, e.g., gender and racial-ethnic background also determine one’s aspirations, performance, personal attainment and development through influencing the motivational role of self-efficacy, outcome expectations and goal-setting [11]. In addition, several studies have also found that disparity and discrimination increase the probability of an individual experiencing passive emotions and attitudes, which in turn negatively influences their performance and reduces their achievements [28]. When a person has an awareness that he has encountered potential unfair treatment, he tends to become more sensitive, and less agreeable and conscientious [28]. Such lack of conscientiousness can, to a certain degree, weaken individual motivation in attempting to fulfil social expectations and self-expectations, which is not conductive to their acquisition of favourable achievements. A lack of confidence among disadvantaged individuals negatively affects their willingness to learn and further their human capital investment, and also prevents them from obtaining satisfactory outcomes and better performance [29].

When it comes to the scenario of Chinese labour force with different hukou status, hukou (household registration) as an external environmental variable established by Chinese public institutions may serve as an obstacle to the devalued group-migrants’ development (including rural-urban migrants in urban city and urban-urban migrants in non-local city). Following SCCT, such external hukou oppression in China directly influences migrants’ self-confidence in terms of their capability to perform (self-efficacy beliefs) and expectations of potential outcomes as shown in Figure 1 [8,10,11]. Specifically, these barriers that migrants realise themselves to suffer from are more likely to cause migrants to report lower self-efficacy belief and negative expectations for the outcome. Such passive attitudes may further restrict migrant’s aspirations regarding income, type of work, leadership position and welfare benefits. Based on the SCCT, migrants’ lower aspirations or ambitions can prevent them from setting appropriate goals when making career decisions. All the negative emotions mentioned above, such as lower self-efficacy beliefs, lower positive outcome expectations, lower aspiration or ambitions and unreasonable goals will influence migrants’ enthusiasm and motivation for work, which has been shown in Figure 1. Thus, these migrants are more likely to take fewer positive actions to organise their abilities and skills efficiently in order to realise these goals [6]. Correspondingly, they may attain fewer successes and achievements in comparison with their similarly talented counterparts with higher self-efficacy beliefs and more positive outcome expectations.

2.1.2. Define Sustainable Development

The general concept of sustainable development refers to the development that satisfies the requirements of present generation without sacrificing resources and opportunities of future generation [30,31,32,33]. It assumes that all the activity related to development in terms of economic, social, environmental, technological and human development should not damage resources for continuing development and should remain for a long-term [34]. There is a large amount of studies on sustainability, and the research fields on sustainable development vary from different subjects. Thus, some researchers state that it is necessary to point out the specific type of sustainability that is concentrated on as all the types of sustainable development are quite different even though each type has similarities and overlaps [32]. Experts in different fields concern about different aspects of sustainability. Particularly, human sustainability mainly refers to the maintenance of human capital through continuous investment over a life-cycle, which includes investment in further job training, education, and nutrition [32]. It is also closely related to social sustainability, as social sustainability aims to establish a favourable relationship between groups of people, realise reciprocity, patience, harmonies, cooperation spirit, forbearance, honesty and ethics [35].

According to Figure 1, our study intends to explore how the hukou discrimination determines individual’s human sustainable development through psychological impacts (SCCT), which further affects economic sustainable development of the entire society because economic development highly depends on the participation of human capital. Therefore, our research mainly concerns about the human sustainability and economic sustainability. Moreover, among the sustainable development goals which was proposed by United Nations (UN) in 2015, equality elimination, adult education (human sustainability), human employment and economic growth are the crucial goals for a society, confirming the importance of exploring human and economic sustainable development [34].

In terms of how the impacts of hukou discrimination on individuals’ psychology and behaviour play a role to determine human and economic sustainable development further, we will elaborate in detail in the next subsection.

2.1.3. Linking Psychology with Sustainable Development

This subsection is to illustrate the further theoretical relationship between individuals’ negative psychology and behaviour which is influenced by external interference such as hukou discrimination (based on SCCT) and the sustainable development. This connection mainly relies on the human capital theory. According to human capital theory, personal productivity and performance depend on a series of human capital investments, including observable educational investment, further job training, working experience and several unobserved devotions, such as personal motivation, aspirations (or ambitions), effort and enthusiasm for work [36,37,38,39,40]. In addition, as one of the important production factors, human capital serves as the basic building blocks of the economic development of enterprises, regions and even the whole country [41,42,43]. In other words, the reasonable and optimised utilisation of human capital in labour market and the mobility of human resources will directly affect the economic development of organisations and regions.

In China, the negative impacts of hukou discrimination on personal aspirations, ambitions, setting rational goals, motivations and positive actions which is derived from SCCT will further influence sustainable development from two aspects. As shown in Figure 1, these two aspects are personal performance or attainments which is ascribed to optimised utilisation of one’s capability and human sustainability, respectively.

With the relaxation of restrictions on human capital mobility, an increasing number of the labour force is attracted to those economically developed regions (e.g., southeast coastal cities in China). Chinese migrant workers already comprise approximately 22% of the whole Chinese population (Data source: China Statistical Yearbook 2018 from National Bureau of Statistics of the People’s Republic of China.), they play a critical role in determining urbanisation construction and stimulating China’s economic growth, especially in the economically developed regions. However, several economically underdeveloped areas are confronted with human capital lost meanwhile, such as the northeast and northwest regions of China. Such unbalanced distribution of human capital may exacerbate the spatial disparity in economic development among different China’s provinces [15,40,44]. In those economically undeveloped areas, the continuous human capital lost may cause an increasingly serious shortage of available labour force, especially under the circumstance that the ageing issue of labour gradually becomes prominent with a low birth rate (Data source: National Bureau of Statistics of China.). Therefore, it is particularly important for the local economic sustainable development to optimise the utilisation of existing human capital in the case of human resource outflow. SCCT indicates that external barriers such as hukou discrimination may restrict disadvantaged individual’s productivity and performance through restraining their psychological aspirations, ambitions, enthusiasm and positive actions [8,11]. Following human capital theory, such lower personal performance due to failure of optimising and maximising the utilisation of one’s abilities and talents will further affect the achievement of one organisation and the regional economic development. Such disparity in economic development for different regions considerably influences future sustainable economic development of the whole society [15].

On the other hand, hukou discrimination may affect economic development through its impact on human sustainability as well. In economically developed regions such as first-tier cities and coastal areas in China, low-skilled migrants are less likely to obtain formal jobs which provide higher earnings, standard social security and welfare benefits [14,45,46]. A large number of unskilled migrants perceive that they are discriminated against and have limited development prospects in the high human capital zones [44]. Such awareness of discrimination and their lower aspirations for the prospective development, therefore, suppresses migrants’ motivations to invest further in their human capital, such as educational investments and subsequent job training [14,44]. The abandonment of investment in one’s human capital is not conductive to human sustainability [32], and this impediment to human capital investment from an economic perspective may result in a substantial waste of human talents. Due to the significance of human capital on economic development based on human capital theory, some researchers indicated that the elimination of such impediments of a migrant’s continuous investment in human capital (i.e., remaining human sustainability) is becoming more important in terms of sustaining Chinese economic growth [15,44].

2.2. Data

The 2010 China General Social Survey (CGSS) was used to examine the relationship between hukou discrimination against people from disadvantaged groups and their aspirations in the Chinese urban labour market. The analytic sample was restricted to 3534 respondents employed in the Chinese urban labour market, with a monthly income. Hukou discrimination in China is not only directed to rural hukou individuals but also against non-local residents whose hukou location (place of household registration) was not the same as their workplace, at the time of writing. The relationship between hukou discrimination and aspirations are explored from two aspects, respectively. Firstly, in order to estimate whether non-local migrants’ aspirations are restricted by non-local hukou discrimination, the sample is divided into local hukou residents and non-local migrants by their current household registration place. The non-local migrant sample here includes both urban-urban migrants (urban hukou migrants in non-local urban city) and rural-urban migrants (rural hukou migrants in urban labour market). Secondly, in order to examine whether rural hukou respondents report lower aspirations due to their rural hukou status in comparison to urban hukou (urban-urban) migrants, all the migrant sample was further divided into urban-urban migrants and rural-urban migrants. The final sample comprised 2980 local hukou residents and 554 non-local migrants. Among the 554 non-local migrants, 284 were urban-urban migrants and 270 rural-urban migrants, respectively. Detailed observations and the distribution for each sample are presented in

Table 1. Descriptive Statistics.

	Overall (3534 obs.)	Local People (2980 obs.)	Urban-Urban Migrants (284 obs.)	Rural-Urban Migrants (270 obs.)
	Mean	Mean	Mean	Mean
Dependent variable
Income aspiration	60,398.59	55,505.15	104,363.7	68,162.91
Independent variable
Current income	28,415.37	24,858.87	59,708.46	34,752.85
Demographic
Age	39.34	40.28	35.14	33.36
Male	0.54	0.55	0.52	0.50
Married	0.83	0.85	0.73	0.76
Number of children	1.13	1.17	0.75	1.06
Highest education level
Illiteracy (Ref.)	0.02	0.02	0.01	0.06
Compulsory education	0.38	0.39	0.14	0.55
Senior high school	0.29	0.29	0.25	0.26
University	0.31	0.30	0.60	0.13
Family background
Father’s highest education level
Illiteracy (Ref.)	0.26	0.27	0.13	0.27
Compulsory education	0.53	0.52	0.53	0.59
Senior high school	0.15	0.15	0.23	0.13
University	0.06	0.06	0.11	0.01
Mother’s highest education level
Illiteracy (Ref.)	0.43	0.44	0.24	0.43
Compulsory education	0.45	0.43	0.53	0.53
Senior high school	0.10	0.10	0.17	0.04
University	0.02	0.03	0.06	0.00
Self-evaluated SES	4.22	4.24	4.40	3.87
Health status
Good health	0.71	0.70	0.75	0.79
Standard health	0.21	0.22	0.20	0.14
Poor health	0.08	0.08	0.05	0.07
Employment status
Employed	0.78	0.78	0.81	0.69
Self-employed	0.22	0.22	0.19	0.31
Working in first-tier city	0.18	0.15	0.43	0.24

Sources: CGSS, 2010.

.

2.3. Measures

2.3.1. Dependent Variable

Following previous studies, the dependent variable (i.e., income aspiration) in this study is measured as the highest amount that respondents expects to earn [23]. All the participants were asked, “Does your present income per year gratify you, relied on your background (i.e., highest education level, occupational status, career positions, experience, working skills, and socio-demographic factors)?” Then, respondents were further questioned: “If you are not gratified with your present income level, how much do you desire to earn based on the background?”. Those respondents who were very satisfied (= 5) and satisfied (= 4) with their current income were not required to answer the second question. This might have caused sample selection bias to a certain degree, if this part of the missing value were to be taken away from the initial sample too curtly. Thus, the missing value of their income aspirations was replaced by the actual income.

2.3.2. Independent Variables

The main factors causing discrimination in the Chinese urban labour market are the key independent variables in this research. As discussed before, hukou discrimination includes two categories: discrimination against non-local hukou labourers in metropolitans and discrimination directly against rural hukou workers in the urban labour market. Two dummy variables were utilised to distinguish those disadvantaged group discriminated against from the advantaged, non-discriminatory group.

Local hukou status. The respondents were asked: “Where is your current household registration place?”, with the responses integrated into local and non-local status.

Rural hukou status. Interviewees reported their hukou status in response to the question: “To which type of household registration do you belong?”. The response was divided into urban and rural status.

2.3.3. Control Variables

Demographic variables include gender (male = 1; female = 0); age (the sample was within the permitted working age range between 16 and 60); marital status (married = 1; others = 0); educational level (illiteracy, compulsory school, higher school, university); health status (good health, standard health, unhealth); and number of children. In addition, previous studies have recognised the factors affecting income aspirations as follows: individual income; family background (e.g., parental education level); socioeconomic status (from 1-significantly below-average level to 10-significantly above-average level); whether working in first-tier cities (1 = yes; 0 = otherwise); and employment status (1 = employed; 0 = self-employed). Therefore, this study controlled all these variables in order to prevent estimation bias caused by variable omission.

2.4. Statistical Modelling

Two regression methods were applied to the estimation in this study: (1) ordinary least squares (OLS), and (2) propensity score matching (PSM).

As two categories of hukou discrimination were explored in our research, two separate OLS models were conducted to test how non-local hukou discrimination and rural hukou discrimination related to migrants’ aspirations.

Ln (Income aspirations) = Local hukou + X + ε₁

(1)

Ln (Income aspirations) = Rural hukou + X + ε₂

(2)

In addition, propensity score matching (PSM) analysis was performed to extend ordinary least squares (OLS) regression analysis and also to compensate for the shortcomings of OLS regression, which is to deal with possible sample selectivity bias issue and potential endogeneity caused by missing key variables. PSM, a good technique for estimating causal treatment effects [47] is utilised to examine the impact of hukou discrimination on aspirations, through matching people who are discriminated against and those who are not discriminated against with similar characteristics. The estimation of causal treatment effects can be attained from the difference in outcome variable between individuals in the treated group and their counterparts in the control group.

The sample in our study can be divided into local sample and migrant sample which can be further separated into urban-urban migrants and rural-urban migrants. When individuals in the treated group are matched to their counterparts in the control group, the discrepancy between the actual and counterfactual income aspirations for the treated group can be calculated as follows:

$${\delta }_{ATT}^{PSM}=E_{P\left(X\right)|local=1}\left\{E\left[Y\left(1\right)\left|local=1,P\left(X\right)\left]-E\right[Y\left(0\right)\right|local=0,P\left(X\right)\right]\right\}$$

(3)

$${\delta }_{ATT}^{PSM}=E_{P\left(X\right)|rural=1}\left\{E\left[Y\left(1\right)\left|rural=1,P\left(X\right)\left]-E\right[Y\left(0\right)\right|rural=0,P\left(X\right)\right]\right\}$$

(4)

3. Results

3.1. Descriptive Statistics

Table 1 provides descriptive statistics by hukou status. An interesting issue is that migrants have higher income aspirations compared to local hukou people. In addition to the higher absolute income, urban-urban migrants also gave higher income aspirations than rural-urban migrants. Among the total migrant sample, urban-urban migrants have a better education level and a superior family background. Specifically, 85% urban-urban migrants had received more education after compulsory education compared to 59% of local people and 39% of rural-urban migrants. Both urban-urban migrants and rural-urban migrants are generally younger than local people. Most of the urban hukou population who chose to work outside their hometown preferred to migrate to first-tier cities. Moreover, the status of the majority of respondents was ‘employed’.

3.2. Linear Regression Estimation

An OLS regression analysis was utilised to estimate two central research questions. The first was to investigate how local hukou status influenced respondents’ income aspirations. As shown in column 1 of

Table 2. Ordinary Least Square Regression.

Dependent Variable (Income Aspirations)	Model 1	Model 2
Local hukou status	−0.2154*** (0.0580)
Rural hukou status		−0.2948** (0.1271)
Log of current income	0.1164*** (0.0064)	0.1365*** (0.0165)
Socio-demographic factors
Age	0.0005 (0.0026)	−0.0071 (0.0074)
Male	0.2743*** (0.0420)	0.3058** (0.1071)
Married	0.1360** (0.0618)	0.1580 (0.1499)
Number of children	−0.0206 (0.0322)	0.0442 (0.0927)
Respondents’ highest education level (Ref. Illiteracy)
Compulsory education	0.3624** (0.1432)	0.4797 (0.3086)
Senior high school	0.6355*** (0.1469)	0.8801** (0.3252)
University	0.9768*** (0.1513)	1.0538** (0.3409)
Father’s highest education level (Ref. Illiteracy)
Compulsory education	0.1065* (0.0578)	0.0267 (0.1668)
Senior high school	0.0986 (0.0792)	−0.1258 (0.2186)
University	0.0698 (0.1109)	0.1220 (0.2973)
Mother’s highest education level (Ref. Illiteracy)
Compulsory education	0.1223** (0.0531)	0.1569 (0.1456)
Senior high school	0.1382 (0.0869)	0.2308 (0.2215)
University	0.0484 (0.1561)	0.2135 (0.3633)
Self-evaluated SES	0.0226* (0.0125)	0.0012 (0.0329)
Health status (Ref. Poor health)
Good health	0.1269 (0.0795)	−0.0039 (0.2188)
Standard health	0.0923 (0.0859)	−0.0890 (0.2421)
Employment status
Employed	−0.1967*** (0.0503)	−0.4742*** (0.1197)
Working in first-tier city	0.3271*** (0.0552)	0.1565 (0.1133)
Observations	3534	554

Note: (1) Figures in parentheses are standard errors; (2) *, **, *** indicate 10%, 5%, 1% significant levels, respectively; (3) CGSS 2010 is utilised; (4) Sample in Model 1 is divided into local residents and non-local migrants and Model 1 presents the effect of local hukou status on migrants’ income aspirations; (5) The sample in Model 2 concentrates on all migrants and is divided into urban-urban migrants and rural-urban migrants. The estimation results show the impact of rural hukou status on rural-urban migrants’ aspirations.

, local hukou status had a negative correlation (β = −0.2154, p < 0.001) with aspirations when controlling for all the other influential determinants for aspirations constant. Local hukou respondents aspired to a 21.54% lower income than all migrants, including both urban-urban migrants and rural-urban migrants.

The second column in Table 2 shows the analysis of the relationship between rural hukou status and income aspirations. Rural hukou status separates the migrants into rural-urban migrants and urban-urban migrants; the negative coefficient of rural hukou on income aspirations (−0.2948) presented a negative relationship with rural-urban migrants’ income aspirations. Specifically, rural-urban migrants reported 29.48% lower income aspirations compared to urban-urban migrants.

3.3. Propensity Score Matching Analysis

As discussed before, the analytical sample was divided into the local sample, urban-urban migrants and rural-urban migrants. PSM, based on the identically observable factors, was utilised to match each sample to avoid the potential issues in OLS regression.

Table 3. Estimated Results of Propensity Score Matching.

Propensity Arithmetic	Difference in ATT	S.E.	T-Value
Panel A: Local Individuals and Migrants
1-to-1 NNM	−0.2771	0.0922	−3.01
1-to-5 NNM	−0.1932	0.0839	−2.30
Radius matching	−0.2282	0.0807	−2.83
LL matching	−0.1877	0.0922	−2.04
Kernel matching	−0.2867	0.0743	−3.86
Panel B: Urban-urban Migrants and Rural-urban Migrants
1-to-1 NNM	−0.3205	0.1881	−1.70
1-to-5 NNM	−0.2624	0.1527	−1.74
Radius matching	−0.3623	0.1634	−2.22
LL matching	−0.2177	0.1880	−1.16
Kernel matching	−0.3237	0.1455	−2.22
Panel C: Urban-urban Migrants and Local Individuals
1-to-1 NNM	0.2794	0.0944	2.96
1-to-5 NNM	0.2983	0.0780	3.82
Radius matching	0.2984	0.0716	4.17
LL matching	0.3272	0.0944	3.47
Kernel matching	0.4014	0.0667	6.02
Panel D: Rural-urban Migrants and Local Individuals
1-to-1 NNM	0.0333	0.1320	0.25
1-to-5 NNM	0.0746	0.1088	0.69
Radius matching	0.0746	0.1114	0.67
LL matching	0.0892	0.1320	0.68
Kernel matching	0.0859	0.1069	0.80

Note: (1) T-statistic is based on two-tail test; Radius is 0.01; (2) CGSS 2010 is utilised; (3) 1-to-1 and 1-to-5 NNM refer to one-to-one and one-to-five nearest-neighbour matching, respectively; (4) LL matching is the abbreviation of local linear matching.

presents the estimated results from five types of PSM for each matching group. The first group comparison shown in Panel A is to match the local sample to all the migrants’ sample and to estimate whether local hukou status influenced aspirations. The overlapping of propensity score density distributions between local residents and all the migrants (including urban hukou migrants and rural hukou migrants) in both matched and unmatched samples are shown in Figure 2. The overlapping distribution between the untreated and treated groups in the matched sample has been improved to a large extent, which confirms that the matching process was successful and significantly reduced bias. Regarding one-to-one nearest-neighbour matching (1-to-1 NNM), the average estimated treatment effect for the treated group (ATT) illustrates that the average value of the income aspirations’ gap between local individuals and non-local migrants was −0.2771. This significant estimation of the ATT at 5% significance level (T-value = −3.01) confirms the OLS estimations shown in Table 2. Following the study testing the sensitivity of PSM [48], another four types of PSM methods (i.e., One-to-five nearest-neighbour matching (1-to-5 NNM) (S.E. = 0.0839, T-value = −2.30); Radius matching (S.E. = 0.0807, T-value = −2.83); Kernel matching (S.E. = 0.0743, T-value = −3.86); and Local linear (LL) matching (S.E. = 0.0922, T-value;−2.04)) were also utilised as a sensitivity examination to explore the robustness of one-to-one nearest-neighbour matching (1-to-1 NNM) results. As shown in Table 3, the estimation of ATT in 1-to-1 NNM was robust and not sensitive to other propensity matching methods.

The Panel B in Table 3 shows the matching results from different matching algorithms while matching urban-urban migrants to rural-urban migrants. As we expected, the negative difference of ATT describes that rural hukou migrants report lower incomes than urban-urban migrants when holding similar endowment characteristics. However, the estimation of difference in ATT between rural-urban migrants and urban-urban migrants from one-to-one nearest-neighbour matching (S.E. = 0.1881, T-value = −1.70) and local linear matching (S.E. = 0.1880, T-value = −1.16) shows that the difference in income aspirations was not significant.

In addition, when local hukou respondents were matched to urban-urban migrants and rural-urban migrants respectively, we found that urban-urban migrants reported significantly higher income aspirations than local hukou respondents in Panel C, when holding similar control variables (|T-value| > 1.734 for 10% significant level). However, the estimated results in Panel D demonstrate that the mean value of difference in income aspirations (difference in ATT) between local hukou respondents and rural hukou migrants was unfortunately insignificant for each matching algorithm (|T-value| < 1.734 for 10% significant level).

4. Discussion

Using 2010 CGSS, this study divided all the sample into local residents, urban-urban migrants and rural-urban migrants and also estimated the different effects of hukou status on the aspirations of each category of people. When we compare rural-urban migrants to urban-urban migrants, both OLS and PSM found that rural-urban migrants discriminated against due to their rural household registration status reported lower income aspirations as expected, despite having similar backgrounds and characteristics as urban-urban migrants. Among all these migrants, our findings suggest that rural hukou discrimination negatively contributes to the disadvantaged group’s (rural-urban migrants’) aspirations, in line with previous studies [5,6,8,12]. As discussed by SCCT, an individual facing protracted discriminated is very likely to underestimate their capabilities and talents, and therefore do not expect to be able to achieve the same high standard positions and incomes as their urban hukou counterparts, even when holding similar characteristics [9,10,11].

Regarding the OLS estimation of the effect of local hukou status on income aspirations, our findings unexpectedly demonstrated that local hukou status negatively correlates with respondents’ aspirations. Specifically, an individual holding local hukou status is more likely to report lower income aspiration compared to non-local migrants. Even if we matched local hukou persons to the total migrant sample with similar observable human characteristics, the outcome illustrates that local individuals reported lower aspirations than the migrants. Although most migrants are discriminated against in terms of occupational selections, positions, wages, securities and welfare benefits in several metropolitans, it seems that their aspirations are not limited to the non-local hukou discrimination, which is not in line with the findings of SCCT and the previous literature.

A potential reason for the findings in our study may be that few unobservable features are distinguishable between each sample. Although we have controlled as many of the observable variables in OLS regression as were found in the literature and have depended on these observable characteristics to match each sample, there are always some intrinsic factors in terms of natural personality that are difficult to observe. Among all the migrants, urban-urban migrants are more likely to be well-educated, have greater ambitious and resilience in general [14]. Specifically, although most urban-urban migrants are aware of the inevitability of hukou discrimination they will suffer from in a new city, such as fewer social and human resources, an unfamiliar environment and higher economic pressure, they still choose to leave their urbanised hometown to struggle in a more developed metropolis, considering that there to be more job opportunities and higher chances of promotion in these cities, in addition to the fact that better education or medical resources in metropolis attract these urban-urban migrants [49]. Therefore, we can assume that these urban-urban migrants might be relatively more uneasy about their current status quo and more ambitious or aspirations in terms of their personalities than their local counterparts, to some extent. From the perspective of the unobservable personality, this group may aspire to obtain more in their new city of residence.

Secondly, another possible reason for this unexpected estimation of local hukou status on respondents’ aspirations may be ascribed to the growth in the number of second-generation migrants after 2000, primarily those born after 1980 who grew up during a period of Chinese economic reform and opening-up [49]. In our sample, 43% of migrants were second-generation. Unlike the first-generation migrants, only a few properties of the second-generation migrants are known, as follow: firstly, they are well-educated in comparison to first-generation migrants [50,51,52,53]; secondly, these second-generation migrants have higher requirements for material life [54,55]; thirdly, an increasing number of rural-urban migrants are not familiar with agricultural activity and the peasantry [50]; and fourthly, these younger rural-urban migrants are more eager to integrate into the urban city than the father-generation migrants [52,56,57]. Most second-generation migrants are reluctant to return to their hometown after few years [51]. In addition, an increasing number of migrants are no longer satisfied with traditional low-skilled and overloaded jobs. Most focus on specific technical industries, such as manufacturing, textiles and electronics. They also have larger ambitions in terms of occupational position (e.g., becoming managers or entrepreneurs) and income [58]. According to the 2010 study by the National Federation of Trade Unions Migrant Workers Task Force, the percentage of second-generation migrants starting a small business in urban cities increased by 10%, in comparison to the previous migrant generation. Following most of the literature generated so far, the main purpose of migration for the first-generation is to earn more money and send it back to support the expenses of the entire families. By contrast, second-generation migrants migrate to a more developed city not only for the higher income and more space in which to improve but also to seek a better quality of daily life [59]. A large proportion of migrants, especially urban-urban migrants, would like to settle in the developed metropolis rather than return to their hometown. Driven by the unbelievably high housing price in China, these migrants may expect to earn more money in order to be able to settle in the metropolis as soon as possible, compared to local settled residents. Consequently, the migrants in our sample were more likely to expect higher incomes in comparison to local respondents.

5. Conclusions

Based on SCCT and human capital theory, we understand that a person’s aspiration or ambition influences the enthusiasm and motivation for work and desire for continuous investment in human capital; thus, further affect his/her own human sustainability and economic sustainable development. Therefore, this study mainly explored the relationship between hukou discrimination individual aspiration from the psychological aspect of labour force. Based on the 2010 CGSS, the sample in this study is divided into local residents, urban-urban migrants and rural-urban migrants for examining the potential relationship between hukou discrimination and income aspirations. We mainly estimate two causal relationships in this study as follows. Firstly, we compare the local residents and the sample of all migrants, and explore the relationship between local hukou status and disadvantaged group’s (all migrants’) income aspirations. Secondly, the migrants’ sample is divided into urban-urban migrants in non-local urban city and rural-urban migrants in urban labour market in order to examine the relationship between rural hukou status and rural hukou migrants’ (rural-urban) income aspirations. The findings of this study present that even if non-local migrants are discriminated against by their non-local hukou status in some metropolises to some extent, their income aspirations are not suppressed by the unfair treatments that they suffer from in non-local urban city. Non-local hukou discrimination against migrants does not contribute to migrants’ aspirations. On the other hand, rural hukou discrimination presents significant and negative effect on rural-urban migrants’ income aspiration, compared to urban-urban migrants. As expected, rural-urban migrants’ aspirations are restricted by their rural hukou status or the rural hukou discrimination. Based on the SCCT, rural-urban migrants’ lower aspiration or ambition which is ascribed to discrimination will influence these migrants not sufficiently maximising the utilisation of their talents, capabilities and effort on work. While suffering from setbacks or continuing discrimination, they may be likely to give up to a large extent, such as returning village. Even though these rural-urban migrants in Chinese urban labour market are excluded from high skilled formal jobs, they still play an indispensable role for city’s construction and development. Such behaviour of not optimising the utilisation of human resources and giving up due to the passive attitudes does not only lead to an unsatisfactory personal performance but also give rise to shortage of labour force in some underdeveloped regions, which is not conductive to social productivity and reginal economic sustainable growth. In addition, rural-urban migrants who suffer from discrimination and report lower ambitions in Chinese urban labour market are also less likely to invest further in their human capital [14,44]. Thus, the human sustainability and the prospect of personal development for rural-urban migrants are not optimistic. The gap between rural-urban migrants and their counterparts (urban hukou individuals) in terms of payment, occupation types and welfare benefits may be becoming more evident. Such increasingly serious inequality between different groups in Chinese urban labour market may negatively affect the stability and sustainability of economic development in China [15,44].

The major contribution of the present study is to develop a comprehensive framework that examines how workers’ income aspiration can be altered by various factors including hukou status, leadership position, income level, work environment, continued training opportunities and benefits. We, to a certain degree, reconcile some of the inconsistencies of previous studies with respect to the application of psychological approaches in the context of China concerning the presence of hukou discrimination, this study thus: (1) Brings a novel approach to explain the income inequality in China by introducing the SCCT; (2) Establish theoretical framework to connect external discrimination, individual psychological aspirations, motivations, performance and achievement, human sustainability and economic sustainability; (3) Contributes to previous literature by exploring individuals’ aspiration from the perspective of income; (4) Provides a greater understanding of the features of the Chinese urban labour market by highlighting the importance of public psychology; (5) Distinguishes the differential effects between urban-urban migrants and rural-urban migrants.

The findings of the present study provide useful empirical evidence for policymakers to reconsider how the income inequality caused by hukou discrimination can be mitigated. From the perspective of cognitive psychology, having an accurate self-aspiration is likely to be achieved via counter-discrimination education, law-making, allowance or creating the sufficient information of labour market; this is particularly important for rural-urban migrants. Moreover, not only do domestic and international scholars appeal for the abolition the traditional hukou system, but governmental agencies (e.g., deputy to the National People’s Congress and the National Development and Reform Commission) also state that the hukou system interferes with the efficient operation of Chinese labour markets and both suggest phasing out this system gradually [60,61] Although the trial of unified hukou system is currently being implemented in some districts of Shanghai, it has not been widely popularised throughout China as a whole. Therefore, policymakers should accelerate the reform of the hukou system to guarantee that migrant labourers’ talents and capability can be utilised adequately which in turn will help to sustain a society’s economic development.

Due to data constraints and the methodology utilised, this study has the following limitations. When conducting PSM estimation, one condition (i.e., unconfoundness) should be met. Specifically, a requirement that all variables determining treatment participation and probable outcome should be taken into account. However, the control variables collection for PSM may suffer from omitted variables bias, such as personal natural disposition that is unavailable in 2010 CGSS. Besides, due to the limitation of dataset that information about respondents’ aspiration can be only obtained from the 2010 CGSS, it is difficult for us to apply the PSM in combination with difference-in-difference (DID) to solve the possible missing variable issue. In addition, there is no available information related to respondents’ activity and intentions for further investment in human capital as well; thus, the impact of our findings that rural-urban migrants’ ambitions or aspirations are restrained by hukou discrimination on individuals’ the subsequent human capital investment and human sustainability can be only inferred by the SCCT and human capital theory. It is difficult for us to obtain appropriate data to conduct further empirical research on this relationship. In spite of these limitations, this study has still made significant creation and contribution in the theoretical framework and research ideas. Overall, if there is a substitutable and longitudinal dataset that involves as more information as we expected, the viable research can apply the PSM in combination with DID to conduct an in-depth analysis of relationship between hukou discrimination and aspirations. Moreover, the relationship between individual aspirations and sustainability can be further empirically explored as well.