Without an urban hukou, or registered residency status, migrant workers in China have experienced an urban–rural cultural divide. Rural workers who migrate to urban areas are socially excluded from the urban mainstream because of hukou national policy and region-specific regulations. In 2014, hukou policy was revised to gradually allow migrant children to receive public education in cities; however, migrants are still challenged by social exclusion and discrimination. This study discusses hukou policy that integrates migrant children into the mainstream educational system and analyzes the social welfare benefits of its policy reforms. It recommends policy to address China’s ‘returned children’ phenomenon.