Relaxing Migration Constraints for Rural Households

Cynthia Kinnan, Shing-Yi Wang, Yongxiang Wang

NBER Working Paper No. 21314
Issued in July 2015, Revised in September 2015
NBER Program(s):Development Economics

This paper exploits two unique features of China's history to study the effects of access to internal migration: reforms to the household registration (hukou) system, and historical migration flows. We show that temporary migration due to a government policy called the “sent-down youth” (SDY) program created lasting inter-province links, so that decades later, hukou reforms in cities which sent SDY increased migration in provinces where those SDY temporarily resided. Using this variation, we find that improved access to migration leads to higher consumption levels and lower consumption volatility for rural households. Furthermore, household production shifts into high-risk, high-return activities.

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Document Object Identifier (DOI): 10.3386/w21314

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