Title: Local public goods on migration: the experience of the Tiebout model from China

Authors: Haijun Bao; Yingying Cen; Kangyin Lv; Li Zhang

Addresses: School of Urban-rural Planning and Management, Zhejiang University of Finance and Economics, Hangzhou, 310018, China ' School of Urban-rural Planning and Management, Zhejiang University of Finance and Economics, Hangzhou, 310018, China ' School of Business, Northeast Normal University, Changchun, 130024, China ' School of Business, Northeast Normal University, Changchun, 130024, China

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.

Keywords: public goods; local fiscal expenditure; migration; Tiebout model; China; regional competition; local government; public resources; economic growth; immigration; culture expenditure; education expenditure; health expenditure; wage income; livelihoods.

DOI: 10.1504/IJSEM.2014.068278

International Journal of Services, Economics and Management, 2014 Vol.6 No.4, pp.357 - 376

Received: 16 Jan 2015
Accepted: 18 Jan 2015

Published online: 25 Mar 2015 *

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