Measuring the Income-Distance Tradeoff for Rural-Urban Migrants in China

No 7160, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Rural-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.

Keywords: income-distance tradeoff; rural-urban migration; hukou system; China (search for similar items in EconPapers)
JEL-codes: O15 R12 R23 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013-01
New Economics Papers: this item is included in nep-cna, nep-dev, nep-geo, nep-mig, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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