Impacts of Migration and Remittances on Ethnic Income Inequality in Rural China

Abstract

This paper examines the impacts of migration and migrants’ remittances on household income in China’s rural minority areas using recent proprietary household data. Treating migrants’ remittances as a potential substitute for income, the results reveal that migration significantly boosts income for all ethnic groups, although the returns to ethnic minority households tend to be less than for Han households. Decomposition analyses further reveal that migration increases inequality between ethnic groups despite reducing spatial inequality, and that the percentage contribution of ethnic inequality to total inequality is larger than that of spatial inequality across sampled rural locations.

Keywords: Migration, Remittances, Ethnicity, Income Inequality, China

JEL Classification: D63, J15, O15