The Effect of Internal Migration on Regional Inequality in China: Evidence from Panel Data Analysis

The causes and consequences of labor migration have been widely studied in multiple disciplines. There is not much doubt that migration is driven to some extent by regional inequality, but the effect of migration on inequality is ambiguous in existing theories and empirical studies which often present mixed or even contradictory conclusions.\ud \ud Focusing on China, this study aims to investigate the effects of internal migration on regional inequality via panel data analysis. It contributes to the literature by linking migration to inequality at both local growth channel and national dynamic channel. The panel data used in this study include all thirty-one province-level administrative units across China for the years\ud 1992 through 2008. Fixed-effects method is adopted to control time-invariant, province-specific\ud characteristics and structural equations modeling strategy allows estimated coefficients to vary\ud across regions.\ud \ud The empirical evidence from this study indicates that whether and how migration affect regional inequality depend on the developmental stages and industrial structures of involved areas. The analytic results also support the notion that the effects of migration on inequality change across regions and time periods. Not only do the findings contribute to the existing\ud debate, but also have important policy implications