Inequality and Internal Migration in China: Evidence from Village Panel Data

Human Development Research Paper No. 2009/27

42 Pages Posted: 24 Aug 2009

See all articles by Junsen Zhang

Junsen Zhang

The Chinese University of Hong Kong (CUHK) - Department of Economics; IZA Institute of Labor Economics

Junjian Yi

University of Chicago

Wei Ha

United Nations - Eastern and Southern Africa Regional Office

Date Written: June 1, 2009

Abstract

This paper analyzes the impact of rural-to-urban migration on income inequality and gender wage gap in source regions using a newly constructed panel dataset for around 100 villages over a ten-year period from 1997 to 2006 in China. Since income inequality is time-persisting, we use a system GMM framework to control for the lagged income inequality, in which contemporary emigration is also validly instrumented. We found a Kuznets (inverse U-shaped) pattern between migration and income inequality in the sending communities. Specifically, contemporary emigration increases income inequality, while lagged emigration has strong income inequality-reducing effect in the sending villages. A 50-percent increase in the lagged emigration rate translates into one-sixth to one-seventh standard deviation reduction in inequality. These effects are robust to the different specifications and different measures of inequality. More interestingly, the estimated relationship between emigration and the gender wage gap also has an inverse Ushaped pattern. Emigration tends to increase the gender wage gap initially, and then tends to decrease it in the sending villages.

Keywords: Internal Migration, Inequality, System GMM

JEL Classification: O15, J61, D31, C33

Suggested Citation

Zhang, Junsen and Yi, Junjian and Ha, Wei, Inequality and Internal Migration in China: Evidence from Village Panel Data (June 1, 2009). Human Development Research Paper No. 2009/27. Available at SSRN: https://ssrn.com/abstract=1458960 or http://dx.doi.org/10.2139/ssrn.1458960

Junsen Zhang

The Chinese University of Hong Kong (CUHK) - Department of Economics ( email )

Shatin, N.T.
Hong Kong
852-2609-8186 (Phone)
852-2603-5805 (Fax)

HOME PAGE: http://www.cuhk.edu.hk/eco/staff/jszhang/jzhang.htm

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Junjian Yi

University of Chicago ( email )

Wei Ha (Contact Author)

United Nations - Eastern and Southern Africa Regional Office ( email )

United Nations complex Gigiri
P.O. Box 44145
Nairobi, 00100
Kenya

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
150
Abstract Views
1,023
rank
211,600
PlumX Metrics