Local public goods on migration: the experience of the Tiebout model from China
by Haijun Bao; Yingying Cen; Kangyin Lv; Li Zhang
International Journal of Services, Economics and Management (IJSEM), Vol. 6, No. 4, 2014

Abstract: Regional competition drives the local government to tilt the public resources to those promoting economic growth rather than people's livelihoods. However, fiscal expenditures related with people's livelihoods, keep a substantial increase after 2005, although China lacks the mechanism of 'voting-with-hands'. Therefore, this paper aims to explore whether the mechanism of 'voting-with-feet' suggested by the Tiebout model works in China. In order to validate the Tiebout model, the fifth national census and 1% population sampling survey data of the inter-provincial migration in 2000 and 2005 were collected. The individual fixed effects method was adopted to estimate the Tiebout model. The results show that the impacts of public goods on migration are significant, and greater on central provinces than eastern and western provinces due to current unbalanced developing pattern. Immigration is proportional to the fiscal expenditures for long-term migration. Moreover, culture, education and health expenditures have a greater impact on migration. In addition, public goods affect migration through acting on wage income at a certain extent.

Online publication date: Wed, 08-Apr-2015

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