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Fiscal Decentralization, Rural Industrialization and Undocumented Labour Mobility in Rural China, 1982–87

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  • Yiu Por (Vincent) Chen

Abstract

Chen Y. P. Fiscal decentralization, rural industrialization and undocumented labour mobility in rural China, 1982–87, Regional Studies. This paper explores the relationship between fiscal decentralization, which gave greater rural industrialization and fiscal authority to local governments, and the emergence of rural–rural undocumented inter-provincial labour migration during China's initial reform period. A Heckman model is employed to correct for the zero observation problems and to estimate consistently the labour mobility with a modified gravity equation. Given the institutional barriers, the fiscal decentralization has two contending effects on labour market integration: local economic development promotes labour mobility, but local public goods crowding restrains the inflow of labour at the destination. The crowding effect is stronger at lower levels of government.

Suggested Citation

  • Yiu Por (Vincent) Chen, 2016. "Fiscal Decentralization, Rural Industrialization and Undocumented Labour Mobility in Rural China, 1982–87," Regional Studies, Taylor & Francis Journals, vol. 50(9), pages 1469-1482, September.
    • Handle: RePEc:taf:regstd:v:50:y:2016:i:9:p:1469-1482
    DOI: 10.1080/00343404.2015.1034666
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    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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