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Human capital externalities and rural-urban migration: Evidence from rural China

  • Liu, Zhiqiang
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    This study examines the determinants of rural-urban migration paying special attention to the role of human capital externalities in the rural sector. Using data from a well-known household survey in China, we find that in rural areas human capital externalities have a discouraging effect on rural-urban migration--everything else being the same, a rural resident from a county rich in human capital is less likely to migrate to the city than his counterpart from another county poor in human capital endowment. We also find some evidence that human capital exerts positive external effects on the likelihood for a rural resident to choose off-farm employment and on labor income in the rural sector. These results are robust to alternative model specifications and estimation methods. One important policy implication from this study is that expanding education opportunities in rural areas can help curtail rural-urban migration and therefore alleviate urban unemployment pressure.

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    File URL: http://www.sciencedirect.com/science/article/B6W46-4S9G94Y-1/2/c9111950bc5c77ec465fb87c592f2108
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    Article provided by Elsevier in its journal China Economic Review.

    Volume (Year): 19 (2008)
    Issue (Month): 3 (September)
    Pages: 521-535

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    Handle: RePEc:eee:chieco:v:19:y:2008:i:3:p:521-535
    Contact details of provider: Web page: http://www.elsevier.com/locate/chieco

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    1. Zhao, Yaohui, 1999. "Labor Migration and Earnings Differences: The Case of Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 47(4), pages 767-82, July.
    2. Liu, Zhiqiang, 1998. "Earnings, Education, and Economic Reforms in Urban China," Economic Development and Cultural Change, University of Chicago Press, vol. 46(4), pages 697-725, July.
    3. Fleisher, Belton M. & Wang, Xiaojun, 2005. "Returns to schooling in China under planning and reform," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 265-277, June.
    4. Enrico Moretti, 2002. "Estimating the Social Return to Higher Education: Evidence From Longitudinal and Repeated Cross-Sectional Data," NBER Working Papers 9108, National Bureau of Economic Research, Inc.
    5. James E. Rauch, 1991. "Productivity Gains From Geographic Concentration of human Capital: Evidence From the Cities," NBER Working Papers 3905, National Bureau of Economic Research, Inc.
    6. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-42, March.
    7. Evans, William N & Oates, Wallace E & Schwab, Robert M, 1992. "Measuring Peer Group Effects: A Study of Teenage Behavior," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 966-91, October.
    8. Lall, Somik V. & Selod, Harris & Shalizi, Zmarak, 2006. "Rural-urban migration in developing countries : a survey of theoretical predictions and empirical findings," Policy Research Working Paper Series 3915, The World Bank.
    9. de Brauw, Alan & Giles, John, 2008. "Migrant opportunity and the educational attainment of youth in rural China," Policy Research Working Paper Series 4526, The World Bank.
    10. Giles, John T. & Mu, Ren, 2006. "Elder Parent Health and the Migration Decision of Adult Children: Evidence from Rural China," IZA Discussion Papers 2333, Institute for the Study of Labor (IZA).
    11. de Brauw, Alan & Huang, Jikun & Rozelle, Scott & Zhang, Linxiu & Zhang, Yigang, 2002. "The Evolution of China's Rural Labor Markets During the Reforms," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 329-353, June.
    12. Liu, Zhiqiang, 2007. "The external returns to education: Evidence from Chinese cities," Journal of Urban Economics, Elsevier, vol. 61(3), pages 542-564, May.
    13. Liu, Zhiqiang, 2005. "Institution and inequality: the hukou system in China," Journal of Comparative Economics, Elsevier, vol. 33(1), pages 133-157, March.
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