Intermigration and intramigration in China: A theoretical and empirical analysis

Harris and Todaro [Am. Econ. Rev. 60 (1970) 126] developed a migration model for less developed countries focusing on equating expected earnings between the rural and urban sectors. Their model provides a useful framework for theoretical studies on rural–urban migration. In practice, the model has critical limitations, as it does not consider the effects of changes in industrial structure and the existence of rural industries on migratory behaviour. In China, for example, the change of industrial development strategy from being capital intensive to being labour intensive after economic reforms, and the rapid growth of a nonfarm sector in the rural areas have important implications on rural–urban migration. This paper uses a panel data from 1995 to 1998 and an alternative migration model to demonstrate that the change of industrial structure and the development of rural nonfarm industries play a significant role in migration decision among the Chinese peasants.