To Stay or to Migrate? When Becker Meets Harris-Todaro / Pei-Ju Liao, Ping Wang, Yin-Chi Wang, Chong Kee Yip.

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Liao, Pei-Ju

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w27767.Publication details: Cambridge, Mass. National Bureau of Economic Research 2020.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Allowing migration activity as an integral part of demographic transition and economic development, we establish a locational quantity-quality trade-off of children and explore its macroeconomic consequences. We construct a dynamic competitive migration equilibrium framework with rural agents heterogeneous in skills and fertility preferences. We then establish and characterize a mixed migration equilibrium where high-skilled rural agents with low fertility preferences always migrate to cities, low-skilled with high fertility preferences always stay, and only an endogenously determined fraction of high-skilled/high fertility preferences or low-skilled/low fertility preferences ends up moving. By calibrating our model to fit the data from China, we find interesting interactions between fertility and migration decisions in various counterfactual experiments with respect to changes in migration, population control and rural land entitlement policies. We conclude that overlooking the locational quantity-quality trade-off of children may lead to nonnegligible biases in assessing the implications and effectiveness of government policies.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w27767 (Browse shelf(Opens below))	Not For Loan

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September 2020.

Allowing migration activity as an integral part of demographic transition and economic development, we establish a locational quantity-quality trade-off of children and explore its macroeconomic consequences. We construct a dynamic competitive migration equilibrium framework with rural agents heterogeneous in skills and fertility preferences. We then establish and characterize a mixed migration equilibrium where high-skilled rural agents with low fertility preferences always migrate to cities, low-skilled with high fertility preferences always stay, and only an endogenously determined fraction of high-skilled/high fertility preferences or low-skilled/low fertility preferences ends up moving. By calibrating our model to fit the data from China, we find interesting interactions between fertility and migration decisions in various counterfactual experiments with respect to changes in migration, population control and rural land entitlement policies. We conclude that overlooking the locational quantity-quality trade-off of children may lead to nonnegligible biases in assessing the implications and effectiveness of government policies.