Household Investment through migration in Rural China

In this paper, we strive to better understand how household investment is affected by participation in migration in rural China. After we describe investment patterns across different regions of rural China, we use a theoretical model to describe a relationship between migration and investment and to generate hypotheses about the relationship consistent with our descriptive findings. We test the hypotheses using household data collected in rural China in 2000 and find that in poorer areas migration increases consumptive investment by nearly 20 percent. We find no evidence of a link between migration and productive investment.