Rural Labor Migration Choice in China & Its Impacts on Rural Households*

Since the mid-1980s, hundreds of millions of Chinese rural laborers have left the countryside to work in towns and cities and it is projected that this number will grow. The current rural-urban migration tide in China may be one of history’s biggest labor movements, however, it has not been fully studied due to limited data availability. This paper uses the micro level data that cover the broadest area, the longest time span and the largest number of rural households to study the determinants and the impacts of migration in China. Evidence shows that household size increases the probability of migration, and that geographic location of households substantively impacts the probability of migration. Across income groups, the marginal effect of lagged income on the likelihood of migration remains the same. Contrary to the conventional wisdom that a huge flow of rural laborers disrupts agricultural production, this study concludes that total grain output declines by less than 2 percent upon migration while household net income increases by 16 percent as a result of migration. The large gain in income arises mainly from the difference between the high urban wage rate and the extremely low marginal product of labor in agriculture.