IZA DP No. 5070: The Effects of Aging on Migration in a Transition Economy: The Case of China
substantially revised version available as IZA DP No. 8351
China has been experiencing two major demographic sea changes since the late 1970s: (i) Internal migration, primarily rural-to-urban, on a scale that dwarfs all other countries at any time in history; and (ii) a shift in its age distribution. The basic question posed in this paper is: How are aging and migration related in post-reform China? We argue that there is probably two-way causality: Shifts in the origin region's age distribution induce changes in the scale and structure of migration, but out- (in-) migration shifts the origin's (destination's) age distribution. We examine theoretically and empirically the relationship between origin age distribution and interprovincial migration in China using province-level census data for 1985-2005. The goal of the paper is two-fold: (i) To develop a more refined theoretical model that explains how a migrant's age affects his/her likelihood of migration; and (ii) to obtain unbiased estimates of the effect of age on the interprovincial migration rate. Our theory section is motivated by the observation that, while most researchers recognize the importance of including age in theoretical and empirical models of migration, the exact reasons for why age affects migration have not been analyzed very thoroughly. We model the migration decision and demonstrate that there is an ambiguous relationship between age and the likelihood of migration. Implications of the theory are tested with an extended modified gravity model using OLS and 2SLS.