Events

Professor Lin Ma
Associate Professor of Economics
School of Economics
Singapore Management University

Leveraging a novel wave of data from the China Household Finance Survey, we document that 55% of cross-prefecture migrants eventually returned to their hometowns, with family and retirement-related concerns being the predominant motivation. To analyze the economic consequences of “return migration”, we build a dynamic spatial general equilibrium model that features multiple migration decisions throughout a lifecycle. The migration decisions hinge on wage differentials, the pension system, access to public goods, and attachments to one’s hometown. We find that the institutional barriers that “forced” the migrants to return home slowed down the pace of urbanization, reduced aggregate output and welfare, and exacerbated spatial inequality in China. Moreover, incorporating return migration in spatial models could alter how the economy responds to economic shocks such as migration and trade liberalization, as well as the effects of place-based policies.