Human capital externalities and rural–urban migration: Evidence from

rural China

Zhiqiang LIU

Department of Economics, State University of New York at Buffalo, Buffalo, NY 14260, United States

Human capital externalities and rural–urban migration Evidence from rural China.pdf
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This study examines the determinants of rural–urban migration paying special attention to the

role of human capital externalities in the rural sector. Using data from a well-known household

survey in China, we find that in rural areas human capital externalities have a discouraging

effect on rural–urban migration—everything else being the same, a rural resident from a county

rich in human capital is less likely to migrate to the city than his counterpart from another

county poor in human capital endowment. We also find some evidence that human capital

exerts positive external effects on the likelihood for a rural resident to choose off-farm

employment and on labor income in the rural sector. These results are robust to alternative

model specifications and estimation methods. One important policy implication from this

study is that expanding education opportunities in rural areas can help curtail rural–urban