Human capital externalities and rural–urban migration: Evidence from
rural ChinaZhiqiang LIU
Department of Economics, State University of New York at Buffalo, Buffalo, NY 14260, United StatesThis 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
migration and therefore alleviate urban unemployment pressure