Educational choice, rural–urban migration and economic development

Pei-Ju Liao (), Ping Wang, Yin-Chi Wang () and Chong Yip
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Pei-Ju Liao: National Taiwan University
Yin-Chi Wang: National Taipei University

Economic Theory, 2022, vol. 74, issue 1, No 1, 67 pages

Abstract: Abstract We develop an overlapping-generations framework of education-based migration that takes place prior to labor-market participation and explore its role for economic development, urbanization and workforce composition. We show that education-based and work-based migration are substitutes and the equilibrium outcome depends crucially on children’s talent distribution, college costs and selectiveness, urban job opportunities, and migration barriers. We establish conflicting partial- and general-equilibrium effects at work for comparative statics, and examine their locational as well as macroeconomic implications for assessing education and migration policies. Applying our model to fit the data from China over 1980–2007, we find that, although education-based migration only amounts to one-fifth of that of work-based migration, it contributes more to per capita output growth than work-based migration owing to its high-skilled nature. Moreover, the abolishment of education-based migration policy and the relaxation of the work-based migration are found to have limited effects on per capita output and urbanization.

Keywords: Educational choice; Rural–urban migration; Urbanization; Skill composition; Development (search for similar items in EconPapers)
JEL-codes: O15 O53 R23 R28 (search for similar items in EconPapers)
Date: 2022
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Working Paper: Educational Choice, Rural-urban Migration and Economic Development (2017)
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DOI: 10.1007/s00199-021-01369-2

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