Educational Choice, Rural-urban Migration and Economic Development

Pei-Ju Liao (), Ping Wang, Yin-Chi Wang and Chong Yip

No 23939, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Observing rapid structural transformation accompanied by a continual process of rural to urban migration in many developing countries, we construct a micro founded dynamic framework to explore how important education-based migration is, as opposed to work-based migration, for economic development, urbanization and city workforce composition. We then calibrate our model to fit the data from China over the period from 1980 to 2007, a developing economy featuring not only large migration flows but major institutional reforms that may affect work and education based migration differently. We find that, although education-based migration only amounts to one-fifth of that of work-based migration, its contribution to the enhancement of per capita output is larger than that of work-based migration. Moreover, the abolishment of the government job assignment for college graduates and the relaxation of the work-based migration have limited effects on economic development and urbanization. Furthermore, the increase in college admission selectivity for rural students plays a crucial but negative role in China's development, lowering per capita output and worsening the high-skilled employment share in urban areas.

JEL-codes: O15 O53 R23 R28 (search for similar items in EconPapers)
Date: 2017-10
New Economics Papers: this item is included in nep-cna, nep-mig, nep-tra and nep-ure
Note: DEV EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published as Pei-Ju Liao & Ping Wang & Yin-Chi Wang & Chong K. Yip, 2022. "Educational choice, rural–urban migration and economic development," Economic Theory, vol 74(1), pages 1-67.

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