Impacts of Income Gap on Migration Decision in China

Using survey data from China, this article examines the determinants of rural to urban migrants' income. Specifically, it studies the effects of income gap on migration decision and its sources. The empirical study demonstrates that income gap significantly influences migration decision. Moreover, our results show that income level depends greatly on education level. By estimating urban to rural income gap, we find that the income differential between migrants and non-migrants is larger for women than for men, which suggests that women receive larger monetary returns as a result of migration. In terms of its decomposition, for men, the contribution of difference in attributes is more important than that of difference in the returns to attributes; for women, their income gap is mainly determined by the differences in returns to attributes.