Migrant Labor Markets and the Welfare of Rural Households in the Developing World : Evidence From China

In this paper, the authors examine the
impact of reductions in barriers to migration on the
consumption of rural households in China. The authors find
that increased migration from rural villages leads to
significant increases in consumption per capita, and that
this effect is stronger for poorer households within
villages. Household income per capita and non-durable
consumption per capita both increase with out-migration, and
increase more for poorer households. The authors also
establish a causal relationship between increased
out-migration and investment in housing and durable goods
assets, and these effects are also stronger for poorer
households. The authors do not find robust evidence,
however, to support a connection between increased migration
and investment in productive activity. Instead, increased
migration is associated with two significant changes for
poorer households: increases both in the total labor
supplied to productive activities and in the land per capita
managed by the household. In examining the effect of
migration, we pay considerable attention to developing and
examining our identification strategy.