Investing for urban-rural migration: the role of education.

Neither clear theoretical interpretation nor empirical validation of public educational investment to urban-rural migration or urbanization exists comprehensively. This paper comprehensively analyzes the relationship between public educational investment and urban-rural migration to fill in this niche. We first discuss the theoretical effect of public educational investment and urban-rural migration. Although public educational investment results in distortion and may hinder economic development in the short term, it will still benefit the economy due to its positive long-term impact on human capital. These benefits include a higher level of urban-rural migration and a deepening level of capital accumulation. The empirical evidence using China's data, where we control for confounding factors, take into account endogeneity of public educational investment and investigate the mechanisms behind the relation, confirms our theoretical discussion. This paper is of great significance in understanding China's past process of urban-rural migration. [ABSTRACT FROM AUTHOR]