From Villages to Urban Neighborhoods: Urbanization and Health

• Published date: 01 March 2023
• Author: Yu Shen,Wenkai Sun
• Date: 01 March 2023
• DOI: http://doi.org/10.1111/cwe.12453

©2023 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 137–158, Vol. 31, No. 2, 2023 137

From Villages to Urban Neighborhoods:

Urbanization and Health

Yu Shen, Wenkai Sun*

Abstract

With rapid urbanization, millions of rural villagers have become urban citizens in China.

This paper estimates the effect of the in situ urbanization policy on an individual’s

health by employing the difference-in-differences framework and using panel survey

data from the China Family Panel Studies. Our fi ndings show that this program, unlike

other kinds of urbanization, which have had negative impacts on mental health or made

people smoke or drink more, increased people’s self-reported health status signifi cantly.

Further mechanism analysis reveals that the in situ urbanization policy aff ected health

by increasing people’s confidence in the future, their satisfaction with their current

lives, and their medical insurance enrollment. This study highlights the importance of

“the city comes to villagers” urbanization in China, and it can play an essential role in

advancing the urbanization rate and avoiding the negative impacts of urbanization on

health.

Keywords: China’s urbanization, conversion of villages to urban neighborhoods, health

consequences, in situ urbanization policy

JEL codes: I12, I18, Q15, R11

I. Introduction

The speed and scale of city expansion in China in recent decades have been unprecedented

(Po, 2012; Zhao and Zou, 2017). This rapid urbanization has been driven by two trends:

First, more than 200 million villagers have migrated from villages to cities. Second,

many rural areas have been reclassifi ed into urban spaces (Chen et al., 2015; Chen et al.,

2021). These two processes are equally important for urbanization. This paper mainly

focuses on the latter – that is, the in situ urbanization policy (IUP), which is also called

*Yu Shen, Lecturer, School of Economics, Nanjing University of Finance and Economics, China. Email:

shenyuruc@163.com; Wenkai Sun (corresponding author), Professor, School of Economics, Renmin

University of China, China. Email: sunwk@ruc.edu.cn. This research was supported financially by the

National Natural Science Foundation of China (Nos. 71673282 and 72073059) and the National Social

Science Foundation of China (No. 19ZDA116).

Yu Shen, Wenkai Sun / 137–158, Vol. 31, No. 2, 2023

©2023 Institute of World Economics and Politics, Chinese Academy of Social Sciences

138

the conversion of villages to urban neighborhoods and is closely related to the more

widely used term “reclassifi cation” in the sense that it concerns the transformation of

settlements from rural to urban (Zhu, 2017).

Through administrative orders, the IUP convert counties into urban districts, rural

townships into towns, villages into urban neighborhoods, and more importantly, rural

residents became urban residents without leaving their homes (Zhu, 1999; Cartier,

2015; Chen et al., 2015; Zhu, 2017). This process has long been recognized in China’s

southeastern coastal regions and it was the main urbanization process from the late

1970s to the late 1990s (Zhu, 2017; Zhu et al., 2021). A phenomenon known as the

“urban village” (chengzhong cun) appeared when the original urban-rural boundaries

were blurred, and the rural areas were naturally incorporated into the urban districts.

Another form of the IUP is the delineation of an area for development outside the city

limits. In this case, the village’s housing plots (zhaiji di) and part of the arable land are

requisitioned but the farmers are still engaged in agricultural industry to a certain extent

and are converted into urban residents on the spot.

A large body of literature has given attention to urban villages, including their

impacts on urban migrants (Lin et al., 2011; Buchori et al., 2021), the interplay of

various actors in the process of regeneration (Lin et al., 2012), the reasons behind

excessive farmland conversion for urban development (Xu et al., 2015), and

neighborhood governance (Po, 2011; Zhao and Zou, 2017; Chen et al., 2021). The

existing research on the IUP mainly focuses on the concept itself, the factors that

infl uence peasants, and how it is implemented (Zhou et al., 2018). However, it is unclear

how exposure to IUP affects the “new urban residents” outside the urban villages,

especially those in rural villages that are far from the original city areas.

In this paper, we have attempted to examine the eff ects of the IUP on health status,

and we have focused on a sample located in areas that were originally rural, far from

any cities. The IUP provided a perfect natural experiment and made isolating the eff ects

of migration from urbanization possible. Using the difference-in-differences (DID)

framework, we found that the IUP led to a significant improvement in self-reported

health status. We explored the mechanisms further by investigating the residents’

confi dence in the future, the eff ect on their incomes, and medical insurance and pension

enrollment. We fi rst found that individuals had more confi dence in the future and were

more satisfied with their lives, and we then found that medical insurance enrollment

increased significantly after the program. Health expenditure also increased. Thus,

people had a better health status, especially based on their subjective evaluation.

This paper contributes to the literature in the following ways. First, we investigated

the impacts of the IUP on health status. Many studies have given attention to China’s