Migration premium? The economic returns to youth inter-province migration in post-reform China

Zhao, M., & Hu, Y. (2019). Migration premium? The economic returns to youth inter-province migration in post-reform China. Journal of Youth Studies, 1-19. https://doi.org/10.1080/13676261.2019.1587153

Mengyao Zhao, PhD Candidate, Bielefeld University

Dr Yang Hu, Lecturer in Sociology and Data Science, Lancaster University

Every year, millions of young people migrate away from their home provinces for higher education and employment in China. However, less is known about the extent to which Chinese young people may benefit economically from their migration. Analyzing nationally representative data from the new China College Student Survey, our paper examines the impact of inter-province migration on the starting salaries of Chinese young people after undergraduate studies.

What is “migration premium”?

A growing body of evidence suggests that young people benefit economically from migration (Jewell, & Faggian, 2014; Kazakis, & Faggian, 2017). To explain potential mechanisms underlying the migration premium, the human capital perspective posits that individuals migrate to maximize lifetime utility at different life stages. Further to the human capital perspective, scholars such as Kaufmann, Bergman and Joye (2004) explicitly conceptualized the capacity to be geographically mobile as a form of capital. The authors indicated that, despite possessing similar levels of human capital, migrants enjoy additional economic returns compared with those who stay put. This conceptualization usefully acknowledges the value of migration—not as a means to an end (of gaining human capital), but as an end in itself, above and beyond human capital. Instead of considering individuals’ “capability” to be mobile as a reified capital (cf. Kaufmann, Bergman, & Joye, 2004), Bourdieu (1986) usefully conceptualized capital as a relational construct: the generation of capital is dependent on social practices (e.g. geographical mobility) that “match” one’s dispositions to the specific “field” in which such dispositions are valued (Bourdieu 1986, 241). Therefore, if young people actively mobilize their dispositions and capital (e.g. human, cultural, social, political and symbolic) through migration to find a most suitable place for education and work (Bourdieu, 1986, 241), we would expect such mobilization to entail favorable economic returns.

Hypothesis 1 (migration premium): Youth migration is associated with a positive economic return, net of pre-existing human, social, political and cultural capital.

A tale of two fields: Education versus work migration

Youth migration in post-reform China is governed by a complex interaction between centralist state-control and market forces; and the interaction has followed divergent paths in the higher education sector and the labor market.

Higher education sector. Post-socialist reforms have entailed the devolution of higher education funding from the central government to regional, provincial and municipal authorities (Wang, 2011). Since the ability of local authorities to establish a university has become closely tied to the socioeconomic resources held within their region, 59% of the national key universities—prestigious and well-funded higher education institutions—are located in eastern China. The uneven geographic spread of universities serves as a major driver for many young people to migrate in order to pursue higher education at a prestigious institution (Liu et al., 2017).

Besides, the central government continues to exert tight control over higher education admissions. Most high school graduates are required to take the College Entrance Examination (CEE)—a nationally standardized assessment that forms an integral part of the university admissions system (Wang, 2011). Although students are afforded some freedom to strategize where and what to study, their mobility often represents the result of state allocation or else a compromise between one’s CEE score, desire to attend a prestigious institution, and a preferred and suitable subject area, in response to state intervention.

Graduate labor market. China’s socioeconomic reform has given young people greater freedom than before to navigate their employment in the graduate labor market. In the 1990s, the centralized job assignment system was abolished. Today, young people in China often actively migrate between provinces in order to secure appropriate employment opportunities and maximize their economic returns.

As migration choices are more limited for education than for work and young people have greater freedom to navigate their work migration as opposed to being institutionally channeled to migrate for higher education (Liu et al., 2017), we expect greater economic returns to Chinese young people’s work than education migration.

Hypothesis 2 (context difference): Work migration generates a higher level of migration premium than migration for higher education.

Stratified access to migration premium: Hukou difference

 China’s hukou (household registration) policy has helped shape youth migration. Given the scarcity of higher education and non-agricultural employment opportunities in rural areas, migration is often the only option for rural young people to participate in higher education and non-agricultural work (Wang, 2011). Negative stigmas attached to rural hukou origin are widely documented in the Chinese labor market (Liu et al., 2017). Compared with their urban-origin counterparts, the negative stigmas and labor market discrimination faced by rural-origin young people may limit or offset the economic premium associated with their migration.

Hypothesis 3 (hukou difference): Migration generates a greater economic premium for young people of urban hukou origin than for young people of rural hukou origin.

Analyzing new national data using propensity score matching

We used data from the 2010, 2013 and 2015 China College Student Survey (CCSS) (see https://ccss.applysquare.com/index for more information). The CCSS is a nationally representative cross-sectional survey conducted by the China Data Center at Tsinghua University. Since our focus is on the impact of migration on starting salaries, we limited our analytical sample to students who had received at least one job offer when surveyed. Information such as location and salary of the highest-paying offer was collected. Our final analytical sample contains 5,906 respondents.

Based on three variables on the respondents’ pre-university province, university province, and employment province (i.e. the province of the highest-paying job offer), we devised a five-fold typology to distinguish inter-province education migration and work migration, based on prior studies (Jewell, & Faggian, 2014; Kazakis, & Faggian, 2016). The five groups are: Non-migrant (neither migrated for education nor for work), late migrant (migrated for work but not for education), return migrant (migrated for education and then returned to one’s province of origin for work), college stayer (migrated for education and stayed in the province of university attendance for work), and repeat migrant (migrated for education and then migrated to a third province for work).

We devised six sets of inter-group comparisons to explore the impact of inter-province migration on young people’s starting salary. Furthermore, we adopted the propensity score matching (PSM) method in our analysis (Jewell, & Faggian, 2014). The outcome variable is the (logged) salary of the highest-paying job offer received by a student, measured in the unit of Chinese yuan.

Migration premium and the exacerbation of social inequalities in China

• Migration premium. The results for the whole sample support Hypothesis 1, that youth migration—for education and for work—is associated with positive economic returns. Our results show that youth migration, particularly for work, generates positive economic returns beyond the accumulation of human, political and cultural capitals, even after controlling for wage disparities across Chinese provinces.
• Education vs. work migration. The results lend support to Hypothesis 2, that work migration is associated with a higher level of economic return than education migration. In addition to demonstrating the existence of the migration premium at an aggregate level, our findings also shed light on the nuanced ways in which this premium is contingent on the context in which migration takes place (cf. Bourdieu, 1986). Chinese young people enjoy a greater migration premium in the increasingly devolved and privatized graduate labor market than in the higher education sector.
• Hukou Hypothesis 3, which states that urban-origin young people enjoy a greater migration premium than those of rural origin, is partly supported by the results. Chinese young people of different hukou origins benefitted unequally from the migration premium, which may serve to entrench pre-existing socioeconomic inequalities between rural and urban hukou holders. We found that young people of urban origin enjoy a higher level of economic return to their education migration than their rural-origin counterparts. Differentiated access to the education migration premium for rural-origin and urban-origin young people comes on top of the fact that urban-origin young people enjoy a substantially higher baseline starting salary than those of the same migration status but of rural origin. Thus, far from being a “grand equalizer,” migration for higher education may exacerbate existing socioeconomic disparities and structural inequalities caused by hukou by stratifying the degree to which young people of rural and urban hukou origins can benefit socioeconomically from the process of migration.

References

Bourdieu, P. (1986). “The Forms of Capital.” In Handbook of Theory and Research for the Sociology of Education, edited by John G. Richardson, 241-258. New York: Greenwood.

Jewell, S., & Faggian, A. (2014). Interregional migration ‘Wage Premia’: the case of creative and science and technology graduates in the UK. In Applied Regional Growth and Innovation Models (pp. 197-214). Springer, Berlin, Heidelberg.

Kaufmann, V., Bergman, M. M., & Joye, D. (2004). Motility: mobility as capital. International journal of urban and regional research, 28(4), 745-756.

Kazakis, P., & Faggian, A. (2017). Mobility, education and labor market outcomes for US graduates: Is selectivity important? The Annals of Regional Science, 1-28.

Liu, Y., Shen, J., Xu, W., & Wang, G. (2017). From school to university to work: migration of highly educated youths in China. The Annals of Regional Science 59(3): 651-76.

Wang, L. (2011). Social exclusion and inequality in higher education in China: A capability perspective. International Journal of Educational Development, 31(3), 277-286.

 Authors’ Bio

Mengyao Zhao is a PhD student at the Faculty of Sociology, Bielefeld University, Germany. Since enrolled in the doctoral program in 2015, she has also worked as a research associate in the research project, “Bright Futures: A Comparative Study of Internal and International Mobility of Chinese Higher Education Students”, which is jointly-funded by the German Research Foundation (DFG), Economic and Social Research Council (UK), and National Science Foundation (China). Her doctoral thesis focuses on “Internal migration and labour market outcomes of college graduates in China”, in which she examines the impact of geographic mobility/migration on sector entry and starting salaries for the new labour market entrants with college degrees in China.

Dr Yang Hu is a Lecturer in the Department of Sociology at Lancaster University, UK. He is also an early career fellow at the Work Family Researchers Network, USA. He obtained his PhD in Sociology as a Gates Scholar from the University of Cambridge. His research focuses on the sociology of families and intimate relationships, race/ethnicity and migration, and East Asian societies. He is the author of Chinese–British Intermarriage: Disentangling Gender and Ethnicity (Palgrave Macmillan, 2016). He has published in the Journal of Marriage and Family, European Sociological Review, Journal of Sex Research, Demographic Research, Environment and Planning A, Population, Space and Place, Journal of Family Issues, and British Journal of Sociology of Education.