The Preference for Larger Cities in China: Evidence from Rural-Urban Migrants

Arbeitspapier

China has long aimed to restrict population growth in large cities but encourages growth in small and medium-sized cities. At the same time, various government policies favor large cities. We conjecture that larger cities in China have more urban amenities and a better quality of life. We thus predict that a typical rural-urban migrant is willing to give up some income in order to live in a larger city. We present a simple model in which rural-urban migrants choose destination cities to maximize utilities from consumption and urban amenities. Drawing data from a large-scale population survey conducted in 2005, we first estimate each migrant's expected earnings in each possible destination city using a semi-parametric method to correct for potential selection bias. We then estimate the typical migrant's preference for city population size, instrumenting population size with its lagged values to control for potential omitted-variables bias. From these estimation results, we calculate the typical migrant's willingness to pay to live in larger cities. Our results show that indeed rural-urban migrants strongly prefer cities with larger populations. We explore possible explanations for this preference and discuss the implications of these findings.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 7562

Classification and Topics

• Classification: Wirtschaft ; Economic Development: Human Resources; Human Development; Income Distribution; Migration ; Size and Spatial Distributions of Regional Economic Activity ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
• Subject: city size ; urban amenities ; rural-urban migration ; hukou system ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Xing, Chunbing ; Zhang, Junfu
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/89798
• Last update: 10.03.2025, 11:42 AM CET