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How migrants’ behaviour shapes their intention to settle in their destination (settlement intention) has rarely been examined. This paper pays special attention to the role of the reference-group effect, captured by subjective economic status, in shaping migrants’ intention to settle in urban China. We found that both sending communities and receiving communities contribute to the reference-group effect on settlement intention. Compared with their relatives, friends, and colleagues in their hometowns and destinations, migrants with a higher subjective economic status have a stronger intention to settle. A 1-unit increase in the relative position of a migrant’s subjective economic status in the sending or receiving community contributes to a 19.6 per cent or 19.4 per cent increase in the possibility of a migrant’s intention to settle. Additionally, cultural assimilation, social participation, and identification mediate the relationship between subjective economic status in the reference group and settlement intention. We also found that objective economic status in the destination increases subjective economic status in the reference group in the hometown and destination. Both objective and subjective economic status affect migrants’ settlement intention.

How subjective economic status matters: the reference-group effect on migrants’ settlement intention in urban China