Migration and Household Investment in Rural China

In this paper, we demonstrate how household investment is affected by participation in

migration in rural China. After describing investment patterns across different regions of rural China, we use a heuristic model to describe a relationship between migration and investment and to generate a set of testable hypotheses. We test the hypotheses using household data that we 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.