@TechReport{iza:izadps:dp9024, author={Chen, Yiu Por (Vincent)}, title={Fiscal Decentralization, Rural Industrialization, and Undocumented Labor Mobility in Rural China (1982-87)}, year={2015}, month={Apr}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={9024}, url={https://www.iza.org/publications/dp9024}, abstract={This paper explores the relationship between fiscal decentralization, which gave greater rural industrialization and fiscal authority to local governments, and the emergence of rural-rural undocumented inter-provincial labor migration during China's initial reform period. A Heckman model is employed to correct for the zero observation problems and to consistently estimate the labor mobility with a modified gravity equation. Given the institutional barriers, the fiscal decentralization has two contending effects on labor market integration: Local economic development promotes labor mobility, but local public goods crowding restrains the inflow of labor at the destination. The crowding effect is stronger at lower levels of government.}, keywords={local public goods;local economic development;fiscal decentralization;rural labor mobility}, }