This paper uses a small, non-representative sample of rural households from China (1991) to examine the impact of internal migration and remittances on crop and household income. Controlling for endogeneity and selection, the authors find that migration and remittances have multiple and contradictory effects on household income. On the one hand, when a migrant leaves a household, crop yields fall and crop income declines by about 33 percent. However, the remittances sent home by the migrant have a positive, countervailing effect on household income. The authors find that each yuan in remittances is associated with 1.36 yuan of additional crop income. In other words, with the receipt of remittances, farm households tend to purchase additional inputs and to substitute capital for labor. On the whole, the authors find that participating in migration increases per capita household income in rural China, for those left behind, by between 16 and 43 percent.
©2003 University of Chicago Press.