IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/27767.html
   My bibliography  Save this paper

To Stay or to Migrate? When Becker Meets Harris-Todaro

Author

Listed:
  • Pei-Ju Liao
  • Ping Wang
  • Yin-Chi Wang
  • Chong Kee Yip

Abstract

Allowing migration activity as an integral part of demographic transition and economic development, we establish a locational quantity-quality trade-off of children and explore its macroeconomic consequences. We construct a dynamic competitive migration equilibrium framework with rural agents heterogeneous in skills and fertility preferences. We then establish and characterize a mixed migration equilibrium where high-skilled rural agents with low fertility preferences always migrate to cities, low-skilled with high fertility preferences always stay, and only an endogenously determined fraction of high-skilled/high fertility preferences or low-skilled/low fertility preferences ends up moving. By calibrating our model to fit the data from China, we find interesting interactions between fertility and migration decisions in various counterfactual experiments with respect to changes in migration, population control and rural land entitlement policies. We conclude that overlooking the locational quantity-quality trade-off of children may lead to nonnegligible biases in assessing the implications and effectiveness of government policies.

Suggested Citation

  • Pei-Ju Liao & Ping Wang & Yin-Chi Wang & Chong Kee Yip, 2020. "To Stay or to Migrate? When Becker Meets Harris-Todaro," NBER Working Papers 27767, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27767
    Note: CH DEV EFG
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w27767.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Carlos Garriga & Aaron Hedlund & Yang Tang & Ping Wang, 2023. "Rural-Urban Migration, Structural Transformation, and Housing Markets in China," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(2), pages 413-440, April.
    2. Pei-Ju Liao & Ping Wang & Yin-Chi Wang & Chong K. Yip, 2022. "Educational choice, rural–urban migration and economic development," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(1), pages 1-67, July.
    3. Todaro, Michael P, 1969. "A Model for Labor Migration and Urban Unemployment in Less Developed Countries," American Economic Review, American Economic Association, vol. 59(1), pages 138-148, March.
    4. T. Terry Cheung, 2022. "Schooling, Skill Demand and Differential Fertility in the Process of Structural Transformation," IEAS Working Paper : academic research 22-A006, Institute of Economics, Academia Sinica, Taipei, Taiwan.
    5. Philippe Aghion & Patrick Bolton, 1997. "A Theory of Trickle-Down Growth and Development," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(2), pages 151-172.
    6. Sato, Yasuhiro & Yamamoto, Kazuhiro, 2005. "Population concentration, urbanization, and demographic transition," Journal of Urban Economics, Elsevier, vol. 58(1), pages 45-61, July.
    7. Ma, Lin & Tang, Yang, 2020. "Geography, trade, and internal migration in China," Journal of Urban Economics, Elsevier, vol. 115(C).
    8. Xiaogang Wu & Donald Treiman, 2004. "The household registration system and social stratification in China: 1955–1996," Demography, Springer;Population Association of America (PAA), vol. 41(2), pages 363-384, May.
    9. repec:oup:qjecon:v:129:y:2014:i:2:p:939-993. is not listed on IDEAS
    10. Paula Gobbi, 2013. "A model of voluntary childlessness," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 963-982, July.
    11. David Lagakos, 2020. "Urban-Rural Gaps in the Developing World: Does Internal Migration Offer Opportunities?," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 174-192, Summer.
    12. Deininger, Klaus & Jin, Songqing, 2009. "Securing property rights in transition: Lessons from implementation of China's rural land contracting law," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 22-38, May.
    13. Zheng Song & Kjetil Storesletten & Yikai Wang & Fabrizio Zilibotti, 2015. "Sharing High Growth across Generations: Pensions and Demographic Transition in China," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(2), pages 1-39, April.
    14. Robert D. Retherford & Minja Kim Choe & Jiajian Chen & Li Xiru & Cui Hongyan, 2005. "How Far Has Fertility in China Really Declined?," Population and Development Review, The Population Council, Inc., vol. 31(1), pages 57-84, March.
    15. Loraine West, 1999. "Pension reform in China: Preparing for the future," Journal of Development Studies, Taylor & Francis Journals, vol. 35(3), pages 153-183.
    16. Gottlieb, Charles & Grobovšek, Jan, 2019. "Communal land and agricultural productivity," Journal of Development Economics, Elsevier, vol. 138(C), pages 135-152.
    17. Robert E. Lucas, Jr., 2004. "Life Earnings and Rural-Urban Migration," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 29-59, February.
    18. Liu, Zhiqiang, 2005. "Institution and inequality: the hukou system in China," Journal of Comparative Economics, Elsevier, vol. 33(1), pages 133-157, March.
    19. Azarnert, Leonid V., 2019. "Migration, Congestion, And Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 23(8), pages 3035-3064, December.
    20. Douglas Almond & Hongbin Li & Shuang Zhang, 2019. "Land Reform and Sex Selection in China," Journal of Political Economy, University of Chicago Press, vol. 127(2), pages 560-585.
    21. Conley, John P. & Konishi, Hideo, 2002. "Migration-proof Tiebout equilibrium: existence and asymptotic efficiency," Journal of Public Economics, Elsevier, vol. 86(2), pages 243-262, November.
    22. Sato, Yasuhiro, 2007. "Economic geography, fertility and migration," Journal of Urban Economics, Elsevier, vol. 61(2), pages 372-387, March.
    23. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    24. Liao, Pei-Ju, 2013. "The one-child policy: A macroeconomic analysis," Journal of Development Economics, Elsevier, vol. 101(C), pages 49-62.
    25. Ran Tao & Zhigang Xu, 2007. "Urbanization, rural land system and social security for migrants in China," Journal of Development Studies, Taylor & Francis Journals, vol. 43(7), pages 1301-1320.
    26. Douglas Gollin & David Lagakos & Michael E. Waugh, 2014. "The Agricultural Productivity Gap," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 939-993.
    27. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
    28. Kaiji Chen & Qing Wang & Tong Xu & Tao Zha, 2020. "Aggregate and Distributional Impacts of LTV Policy: Evidence from China's Micro Data," NBER Working Papers 28092, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pei-Ju Liao & Ping Wang & Yin-Chi Wang & Chong K. Yip, 2020. "Fertility and Internal Migration," Review, Federal Reserve Bank of St. Louis, vol. 102(4), pages 429-445, October.
    2. Fried, Stephie & Lagakos, David, 2021. "Rural electrification, migration and structural transformation: Evidence from Ethiopia," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    3. Garriga, Carlos & Hedlund, Aaron & Tang, Yang & Wang, Ping, 2021. "Rural-urban migration and house prices in China," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    4. William R. Emmons & Jacob Haas & Christopher J. Neely, 2020. "Responses of International Central Banks to the COVID-19 Crisis," Review, Federal Reserve Bank of St. Louis, vol. 102(4), pages 338-384, October.
    5. Navarro, Salvador & Zhou, Jin, 2024. "Human capital and migration: A cautionary tale," Journal of Econometrics, Elsevier, vol. 243(1).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xiang Li & Xiaoqin Guo, 2023. "Can Policy Promote Agricultural Service Outsourcing? Quasi-Natural Experimental Evidence from China," Sustainability, MDPI, vol. 15(2), pages 1-18, January.
    2. Yin-Chi Wang & Ping Wang & Chong Yip & Pei-Ju Liao, 2017. "Educational Choice, Rural-urban Migration and Economic Development: The Role of Zhaosheng in China," 2017 Meeting Papers 738, Society for Economic Dynamics.
    3. Garriga, Carlos & Hedlund, Aaron & Tang, Yang & Wang, Ping, 2021. "Rural-urban migration and house prices in China," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    4. Bairoliya, Neha & Miller, Ray, 2021. "Social insurance, demographics, and rural-urban migration in China," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    5. L Rachel Ngai & Christopher A Pissarides & Jin Wang, 2019. "China’s Mobility Barriers and Employment Allocations," Journal of the European Economic Association, European Economic Association, vol. 17(5), pages 1617-1653.
    6. Hengzhou Xu & Yihang Zhao & Ronghui Tan & Hongchun Yin, 2017. "Does the Policy of Rural Land Rights Confirmation Promote the Transfer of Farmland in China?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 67(4), pages 643-672, December.
    7. Madoka Muroishi & Akira Yakita, 2021. "Agglomeration economies, congestion diseconomies, and fertility dynamics in a two-region economy," Letters in Spatial and Resource Sciences, Springer, vol. 14(1), pages 51-63, April.
    8. Gao, Xuwen & Shi, Xinjie & Fang, Shile, 2021. "Property rights and misallocation: Evidence from land certification in China," World Development, Elsevier, vol. 147(C).
    9. Selod, Harris & Shilpi, Forhad, 2021. "Rural-urban migration in developing countries: Lessons from the literature," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    10. Jia, Lili, 2012. "Land fragmentation and off-farm labor supply in China," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 66, number 66, September.
    11. Pei-Ju Liao & Ping Wang & Yin-Chi Wang & Chong K. Yip, 2020. "Fertility and Internal Migration," Review, Federal Reserve Bank of St. Louis, vol. 102(4), pages 429-445, October.
    12. Takakura, Kei, 2023. "Child mortality, child labor, fertility, and demographics," Economic Modelling, Elsevier, vol. 127(C).
    13. Shi, Xinjie & Huangfu, Bingyu & Jin, Songqing & Gao, Xuwen, 2024. "Property rights, labor reallocation, and gender inequality in rural China," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 325-342.
    14. Monteforte, Fabio, 2020. "Structural change, the push-pull hypothesis and the Spanish labour market," Economic Modelling, Elsevier, vol. 86(C), pages 148-169.
    15. William R. Emmons & Jacob Haas & Christopher J. Neely, 2020. "Responses of International Central Banks to the COVID-19 Crisis," Review, Federal Reserve Bank of St. Louis, vol. 102(4), pages 338-384, October.
    16. Leonid V Azarnert, 2023. "Population sorting and human capital accumulation," Oxford Economic Papers, Oxford University Press, vol. 75(3), pages 780-801.
    17. Qu, Zhaopeng (Frank) & Zhao, Zhong, 2008. "Urban-Rural Consumption Inequality in China from 1988 to 2002: Evidence from Quantile Regression Decomposition," IZA Discussion Papers 3659, Institute of Labor Economics (IZA).
    18. Leung, Charles Ka Yui & Ng, Joe Cho Yiu, 2018. "Macro Aspects of Housing," MPRA Paper 93512, University Library of Munich, Germany.
    19. Cyril Monnet & Erwan Quintin & Thorsten V. Koeppl, 2007. "The Poor, The Rich And The Enforcer: Institutional Choice And Growth," Working Paper 1150, Economics Department, Queen's University.
    20. Michel Beine & Frédéric Docquier & Maurice Schiff, 2013. "International migration, transfer of norms and home country fertility," Canadian Journal of Economics, Canadian Economics Association, vol. 46(4), pages 1406-1430, November.

    More about this item

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:27767. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.