Migrant Labor Markets and the Welfare of Rural Households in the Developing World: Evidence from China
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In this paper, we examine the impact of reductions in barriers to migration on the consumption
of rural households in China. We 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. We 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. We 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.