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The Preference for Larger Cities in China: Evidence from Rural-Urban Migrants

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  • Xing, Chunbing

    ()
    (Beijing Normal University)

  • Zhang, Junfu

    ()
    (Clark University)

Abstract

China has long aimed to restrict population growth in large cities but encourages growth in small and medium-sized cities. At the same time, various government policies favor large cities. We conjecture that larger cities in China have more urban amenities and a better quality of life. We thus predict that a typical rural-urban migrant is willing to give up some income in order to live in a larger city. We present a simple model in which rural-urban migrants choose destination cities to maximize utilities from consumption and urban amenities. Drawing data from a large-scale population survey conducted in 2005, we first estimate each migrant's expected earnings in each possible destination city using a semi-parametric method to correct for potential selection bias. We then estimate the typical migrant's preference for city population size, instrumenting population size with its lagged values to control for potential omitted-variables bias. From these estimation results, we calculate the typical migrant's willingness to pay to live in larger cities. Our results show that indeed rural-urban migrants strongly prefer cities with larger populations. We explore possible explanations for this preference and discuss the implications of these findings.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7562.

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Length: 35 pages
Date of creation: Aug 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7562

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Keywords: city size; urban amenities; rural-urban migration; hukou system; China;

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  1. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, Econometric Society, vol. 51(2), pages 507-12, March.
  2. François Bourguignon & Martin Fournier & Marc Gurgand, 2007. "Selection Bias Corrections Based On The Multinomial Logit Model: Monte Carlo Comparisons," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 174-205, 02.
  3. Jorge De la Roca & Diego Puga, 2013. "Learning By Working In Big Cities," Working Papers wp2013_1301, CEMFI.
  4. Gordon B. Dahl, 2002. "Mobility and the Return to Education: Testing a Roy Model with Multiple Markets," Econometrica, Econometric Society, Econometric Society, vol. 70(6), pages 2367-2420, November.
  5. David Albouy, 2008. "Are Big Cities Bad Places to Live? Estimating Quality of Life across Metropolitan Areas," NBER Working Papers 14472, National Bureau of Economic Research, Inc.
  6. Zhang, Junfu & Zhao, Zhong, 2013. "Measuring the Income-Distance Tradeoff for Rural-Urban Migrants in China," IZA Discussion Papers 7160, Institute for the Study of Labor (IZA).
  7. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 90(6), pages 1257-78, December.
  8. Patrick Bayer & Nathaniel Keohane & Christopher Timmins, 2006. "Migration and Hedonic Valuation: The Case of Air Quality," NBER Working Papers 12106, National Bureau of Economic Research, Inc.
  9. Fujita, Masahisa & Mori, Tomoya & Henderson, J. Vernon & Kanemoto, Yoshitsugu, 2004. "Spatial distribution of economic activities in Japan and China," Handbook of Regional and Urban Economics, Elsevier, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 65, pages 2911-2977 Elsevier.
  10. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-56, September.
  11. Meng, Xin & Zhang, Dandan, 2010. "Labour Market Impact of Large Scale Internal Migration on Chinese Urban 'Native' Workers," IZA Discussion Papers 5288, Institute for the Study of Labor (IZA).
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