Effects of rural-to-urban migration on workers' wages and returns to education in China

Abstract

The income gap between rural and urban residents has widened rapidly in the decades following the Reform and Opening-up policy in China. Despite the widespread and ongoing migration of workers from rural areas to urban areas for better jobs and wages, little is known about the gap between of returns to investments in education of rural migrant workers between rural non-migrant workers. Using individual-level data from the 2018 China General Social Survey (CGSS), this study estimates the returns to migration and returns to education for migrated wage workers using the Linear Regression with Endogenous Treatment and Sample Selection model, which simultaneously corrects for selection bias due to both the wage employment decision and the migration decision. The results show that migration after graduation increases wages and returns to education of rural wage workers. Female rural wage workers are more likely to migrate than male rural wage workers. Furthermore, female rural wage workers have higher returns to migration and returns to education than rural male wage workers.