Empirical analysis reveals that rural pension policies significantly influence migration costs and labor allocation, indicating potential GDP and welfare improvements.
Key Points
Migration costs are significant, affecting the rural-to-urban movement and overall labor dynamics.
Sectoral productivity differences contribute greatly to income gaps, with sorting being a minor factor in this analysis.
The study employs a general equilibrium household model to assess the impacts of rural pensions on labor allocation and welfare.
Scaling up the rural pension policy could yield larger positive effects on GDP and overall welfare, even with reduced migration costs.