The Impact of Migration on Rural Poverty and Inequality: A Case Study in China

46 Pages Posted: 6 Mar 2014

See all articles by Nong Zhu

Nong Zhu

University of Quebec at Montreal (INRS-UCS)

Xubei Luo

World Bank

Date Written: January 3, 2014

Abstract

Large numbers of agricultural labor moved from the countryside to cities after the economic reforms in China. Migration and remittances play an important role in transforming the structure of rural household income. This paper examines the impact of rural-to-urban migration on rural poverty and inequality in a mountainous area of Hubei province using the data of a 2002 household survey. Since migration income is a potential substitute of farm income, we present counterfactual scenarios of what rural income, poverty, and inequality would have been in the absence of migration. Our results show that, by providing alternatives to households with lower marginal labor productivity in agriculture, migration leads to an increase in rural income. In contrast to many studies that suggest the increasing share of non-farm income in total income widens inequality, this paper offers support for the hypothesis that migration tends to have egalitarian effects on rural income for three reasons: (i) migration is rational self-selection – farmers with higher expected return in agricultural activities and/or in local non-farm activities choose to remain in countryside while those with higher expected return in urban non-farm sectors migrate; (ii) households facing binding constraints of land shortage are more likely to migrate; (iii) poorer households benefit disproportionately from migration.

Keywords: migration, poverty, inequality, China

Suggested Citation

Zhu, Nong and Luo, Xubei, The Impact of Migration on Rural Poverty and Inequality: A Case Study in China (January 3, 2014). CIRANO - Scientific Publications 2014s-08, Available at SSRN: https://ssrn.com/abstract=2403896 or http://dx.doi.org/10.2139/ssrn.2403896

Nong Zhu (Contact Author)

University of Quebec at Montreal (INRS-UCS) ( email )

P.O. Box 8888, Downtown Station
Succursale Centre Ville
Montreal, Quebec H3C 3P8
Canada

Xubei Luo

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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