Destination homeownership and labor force participation: Evidence from rural-to-urban migrants in China

Abstract

China's rapid economic growth is associated with a dramatic flow of migrants from rural to urban areas, some of whom purchase properties in their destination cities. The literature shows that homeownership may reduce owners’ mobility and deteriorate their labor market performance. Using data from the 2016 China Migrants Dynamic Survey (CMDS) and the 2017 China Household Finance Survey (CHFS), we examine the effect of homeownership on labor force participation (LFP). We find that, compared to rental migrants, homeowner migrants, particularly married females, are less likely to participate in the labor force. Mechanism analysis shows that commuting time to potential jobs increases after migrants live in their properties and females are more sensitive to commuting costs because of domestic responsibilities.