Telecommunication Externality on Migration: Evidence from Chinese Villages
39 Pages Posted: 9 Sep 2014
Date Written: September 7, 2014
We use a unique data set of Chinese villages to investigate whether access to telecommunications, in particular, landline phones, increases the likelihood of outmigration. By using regional and time variations in the installation of landline phones, our difference-in-differences (DID) estimation shows that the access to landline phones increases the ratio of out-migrant workers by 2.1 percentage points, or about 54 percent of the sample mean in China. The results remain robust to a battery of validity checks. Furthermore, landline phones affect outmigration through two channels: information access on job opportunities and timely contact with left-behind family members. Our findings underscore the positive migration externality of expanding telecommunications access in rural areas, especially in places where migration potential is large.
Keywords: Landline phones; telecommunications; migration; network effect; psychological costs; China
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