Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279374 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10623
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We develop a quantitative spatial equilibrium model with endogenous migration and remittance decisions within households to examine the joint effect of migration and remittances on economic development. We apply the model to internal migration in China. Counterfactual analysis of the calibrated model shows that the presence of remittances increases migration and welfare, reduces regional inequality and facilitates structural change. Compared to a conventional single-person migration model, our household model suggests a larger reduction in regional inequality and stronger reallocation of employment from agriculture to manufacturing and services in response to the decline in migration costs over the period of 2000 to 2010.
Subjects: 
remittances
migration
structural change
spatial equilibrium
JEL: 
O10
R10
R20
Document Type: 
Working Paper
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