Measuring the Income-Distance Tradeoff for Rural-Urban Migrants in China
AbstractRural-urban migrants in China appear to prefer nearby destination cities. To gain a better understanding of this phenomenon, we build a simple model in which migrants from rural areas choose among potential destination cities to maximize utility. The distance between a migrant's home village and destination city is explicitly included in the utility function. Using recent survey data, we first estimate an individual's expected income in each potential destination city using a semi-parametric method, controlling for potential self-selection biases. We then estimate the indirect utility function for rural- urban migrants in China based on their migration destination choices. Our baseline estimates suggest that to induce a migrant to move 10 percent further away from home, the income of this migrant has to increase by 15 percent. This elasticity varies very little with migration distance; it is slightly higher for female than male migrants; it is not affected by the migrant's age, education, or marital status. We explore possible explanations of these results and discuss their policy implications.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7160.
Length: 41 pages
Date of creation: Jan 2013
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Find related papers by JEL classification:
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-02-16 (All new papers)
- NEP-CNA-2013-02-16 (China)
- NEP-DEV-2013-02-16 (Development)
- NEP-GEO-2013-02-16 (Economic Geography)
- NEP-MIG-2013-02-16 (Economics of Human Migration)
- NEP-TRA-2013-02-16 (Transition Economics)
- NEP-URE-2013-02-16 (Urban & Real Estate Economics)
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