Investing for urban-rural migration: the role of education

Abstract

Neither clear theoretical interpretation nor empirical validation of public educational investment to urban-rural migration or urbanization exists comprehensively. This paper comprehensively analyzes the relationship between public educational investment and urban-rural migration to fill in this niche. We first discuss the theoretical effect of public educational investment and urban-rural migration. Although public educational investment results in distortion and may hinder economic development in the short term, it will still benefit the economy due to its positive long-term impact on human capital. These benefits include a higher level of urban-rural migration and a deepening level of capital accumulation. The empirical evidence using China’s data, where we control for confounding factors, take into account endogeneity of public educational investment and investigate the mechanisms behind the relation, confirms our theoretical discussion. This paper is of great significance in understanding China’s past process of urban-rural migration.

Keywords:

• Urban-rural migration
• urbanization
• public educational investment
• human capital

JEL classification:

• I28
• O11; O15

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Urbanization, urban-rural migration, internal migration or simply migration will be used interchangeably in this paper.

Additional information

Funding

This paper was funded by the Key Project of the 13th Five-Year Plan of Beijing Education Sciences [grant number CAGA18087], the Key Project of National Statistical Research of China [grant number 2017LZ21], the National Natural Science Foundation of China [NSF projects numbers 71833003 and 71603026] and the Fundamental Research Funds for the central Universities in UIBE [grant number CXTD10-10].

Notes on contributors

Xun Zhang

Xun Zhang is associate professor from Beijing Normal University, Beijing, China. He also serves as a research fellow in Shanghai Finance Institute, Shanghai, China. His research interests are development economics and Chinese economy.

Hua Niu

Hua Niu is assistant professor from University of International Business and Economics, Beijing, China. Her research interests are national accounts and development economics.

Guanghua Wan

Guanghua Wan is professor from Institute of World Economy, Fudan University, Shanghai, China. His research interests are development economics and income distribution.

Chen Wang

Chen Wang is associate professor from School of Urban and Regional Science, Shanghai University of Finance and Economics, Shanghai, China. Her research interests are development economics and income distribution.