Locational decisions and subjective well-being: an empirical study of Chinese urban migrants.

CHINA; SHANGHAI (China); GUANGZHOU (China)

Motivated by the popularity of 'Run away from Beijing, Shanghai, and Guangzhou' saying in China this paper tests the determinants of subjective well-being (SWB) of long-term migrants and the extent to which migrants make optimal locational decisions in terms of SWB. China's cities are divided into 4 core first-tier cities, 15 new first-tier cities, and non-first-tier cities (94 in the sample) reflecting different levels of economic opportunity and amenities. Migrants can only be observed in their present location. Hence, we use a semi-parametric marginal treatment effect method to compare actual and counterfactual SWB outcomes. Results shows that migrants' SWB is greater in non-first-tier cities than first-tier cities; the determinants of SWB differ for male and female migrants; and, female migrants with urban hukou are typically better off in the four core first-tier cities as well as other first-tier cities. Overall, there is thus a marked gender differences in migrants' optimal locational choice. From a productivity and social cohesion perspective, these results make it imperative that public policy in China addresses the gender and spatial sorting imbalances that arises from differences in SWB determinants and optimal location as ever more educated young people join the labour force. [ABSTRACT FROM AUTHOR]

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