The Impact Of2008Global Financial Crisis On Remitting Behavior Of Rural-Urban Migrants In China

Though the employment effect on rural-urban migrant workers of2008financial crises has been frequently discussed in literature, little research has been done on its effect on the migrants’remittances. I use data from field surveys on the rural households in Zhijiang, Hubei province, from2006to2010to examine the impact of global financial crisis on the remittances of rural-urban migrants in China. This research is expected to fill the empty in research on how the2008financial crisis has affected the migrants’behavior to remit. The empirical models in this paper are firmly based on the theories on determinants of migrants in microeconomics of remittances. A DID methodology is used to examine the financial crisis’s impact on the remittances of treatment group relative to the control group. Those who work in coastal areas are treated as treatment group and those who work in inland areas as control group. I find that those who work in coastal areas have experienced an extra drop of the growth of their remittances.To deal with possible bias caused by labor mobility, I estimate the DID model with observations who have not changed their locations and negative impact of financial crisis on remittances is also found. I further use a placebo test to provide robustness check of my findings.