Qianqian Shang (CEMFI)

Internal Migration and Education: The Role of Old-age Support 

Abstract

In most developing countries, pension systems are poorly developed and the elderly rely on their children for old-age support. However, with increasing trends in rural-to-urban migration, many elder parents are left alone with limited assistance. This paper investigates whether parents may strategically lower the education investment in children to reduce the probability of their children out-migrating. In particular, I examine whether the Hukou reforms, which greatly relaxed migration restrictions in rural China, had detrimental effects on educational investments. Exploiting the variation in the timing of exposure to Hukou reforms across prefectures and cohorts, I show that the probability of children being enrolled in high school decreases by 0.1 standard deviations if the migration restrictions at high-school entry age are relaxed by one standard deviation. The effect is larger for parents whose ideal living arrangement at old age is to live near their children. Furthermore, the negative effects only exist for parents without pension entitlement. The results suggest that in contexts with weak policies for old-age support, lifting migration restrictions may have detrimental effects on human capital accumulation. 

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