Home >> Working Paper
Household Consumption Upgrade, Technology Progress, Factor Price Distortion and Rural-To-Urban Labor Migration in China
Read        DownLoad
TitleHousehold Consumption Upgrade, Technology Progress, Factor Price Distortion and Rural-To-Urban Labor Migration in China  
AuthorFang Fuqian*,Yu Jian**,Cheng Dong*** and Zheng Wenping  
OrganizationSchool of Economics, Renmin University of China;** School of Economics, Central University of Finance and Economics;*** Department of Economics, Vanderbilt University,;; 
Key WordsHousehold Consumption Upgrade; Technology Progress; Wage Distortion; Capital Rent Distortion; Rural-to-urban Labor Migration 
AbstractThis paper constructs a two-sector dynamic general equilibrium model to investigate the mechanism of how each of the following four factors influences China’s rural-to-urban labor migration, i.e., household consumption upgrade, technology progress, sectorial capital rent distortion, and wage distortion. We also explore the relative contribution of each factor in a unified framework. Our steady-state numerical results show that each of the four factors has a positive impact on labor migration to a different extent. When all four factors deviate by 0.1 unit from the initial steady state, household consumption upgrade exhibits the largest impact by promoting 4.63% more labor migration. The capital rent distortion and technology progress come closely with2.68% and 2.34% more migration while wage distortion has the weakest effect with only 0.84% more. This finding implies that the dominant reason for China’s rural-to-urban labor migration is essentially compound, which is significantly different from the United States case with just a single leading cause. Our finding also suggests the limited explanation power of Lewis model that excessively emphasizes the importance of sectorial wage difference across rural and urban areas.  
Serial NumberWP891 
  • Institute of Economics, Chinese Academy of Social Sciences
  • Copyright Economic Research Journal
  • The uploaded articles by this website express the authors’ views, not necessarily the views of this website.
  • Perennial Legal Counsel: Lu Kang (Chong Guang Law Office)
  • ISSN 0577-9154 CN 11-1081/F Postal Distribution Code 2-25l (Domestic) M16 (Overseas)
  • ICP 10211437 (Beijng)
  • No.2,Yuetan Bei Xiaojie, Xicheng District, Beijing 100836, P. R. China
  • Phone/Fax: (+8610) 68034153