Working Paper: NBER ID: w23939
Authors: Peiju Liao; Ping Wang; Yinchi Wang; Chong Kee Yip
Abstract: Observing rapid structural transformation accompanied by a continual process of rural to urban migration in many developing countries, we construct a micro founded dynamic framework to explore how important education-based migration is, as opposed to work-based migration, for economic development, urbanization and city workforce composition. We then calibrate our model to fit the data from China over the period from 1980 to 2007, a developing economy featuring not only large migration flows but major institutional reforms that may affect work and education based migration differently. We find that, although education-based migration only amounts to one-fifth of that of work-based migration, its contribution to the enhancement of per capita output is larger than that of work-based migration. Moreover, the abolishment of the government job assignment for college graduates and the relaxation of the work-based migration have limited effects on economic development and urbanization. Furthermore, the increase in college admission selectivity for rural students plays a crucial but negative role in China's development, lowering per capita output and worsening the high-skilled employment share in urban areas.
Keywords: Rural-Urban Migration; Economic Development; Education-Based Migration
JEL Codes: O15; O53; R23; R28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| education-based migration (I25) | per capita output (E23) |
| work-based migration (J61) | per capita output (E23) |
| abolishment of GJA policy (J68) | economic development (O29) |
| relaxation of work-based migration (J61) | economic development (O29) |
| increased college admission selectivity (D29) | per capita output (E23) |
| increased college admission selectivity (D29) | high-skilled employment share in urban areas (J24) |
| education-based migration (I25) | skill-enhanced development (J24) |