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Social insurance, demographics, and rural-urban migration in China

Neha Bairoliya and Ray Miller

Regional Science and Urban Economics, 2021, vol. 91, issue C

Abstract: We develop a dynamic general equilibrium model to analyze the impact of social insurance policy and demographic changes on rural-urban migration in China. Quantitative analyses indicate that different social insurance programs not only have differential effects on net migration flows but also on the age and income distribution of migrants. Enrolling migrants in urban pensions discourages rural-urban migration at young ages and reverse migration in old-age. In contrast, urban health insurance incentivizes rural-urban migration among low income groups at all ages while simultaneously disincentivizing reverse migration. These differences subsequently have important impacts on overall migration patterns and the macroeconomy. Incorporating population aging in the model also yields an increase in the working age migrant share as higher capital accumulation maintains significant upward pressure on urban wages. Overall, results indicate that general equilibrium effects matter and demographic and policy changes alter migration incentives differently at different stages of the life-cycle.

Keywords: China; Internal migration; Health; Aging; Healthcare; Pension (search for similar items in EconPapers)
JEL-codes: E62 H55 I13 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:91:y:2021:i:c:s0166046220303008

DOI: 10.1016/j.regsciurbeco.2020.103615

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