DP18418 Floating population: migration with(out) family and the spatial distribution of economic activity
This paper argues that migrants' decision to bring their dependent family members shapes their consumption behavior, their choice of destination, and their sensitivity to migration barriers. We document that in China: (i) rural migrants disproportionately move to expensive cities; (ii) in these cities, they live without their family and in poorer housing conditions; and (iii) they remit more, especially when living without their family. We then develop a quantitative general equilibrium spatial model in which migrant households choose whether, how (with or without their family), and where to migrate. We estimate the model using plausibly exogenous variation in wages, housing prices, and exposure to family migration costs. We use the model to estimate migration costs and relate them to migration policy. We find that hukou policies protect workers in large, expensive, and high income cities at the expense of rural households, who use remittances to overcome some of these costs.
