Residential neighbourhood choices, capital investment and economic integration of migrants in Chinese cities

Abstract

As the basic element and most crucial step in the integration process, economic integration is a major theme in migration research. However, few researchers study economic integration from the perspective of residential neighbourhood choices. Based on the China Migrants Dynamic Survey, we explore the association between migrants' residential neighbourhood choices and economic integration in Chinese cities and examine the underlying mechanism of this association. Instrumental variable estimation, an endogenous switching regression model and propensity score matching are applied to control endogeneity problems and to perform robustness checks. The results show that living in formal neighbourhoods (commodity housing, affordable housing, work unit housing, or industrial and mining enterprise neighbourhoods) can promote the economic integration of migrants in China. The impact of migrants' neighbourhood choices on their economic integration occurs partly through human capital investment and social capital investment. When both kinds of investment exist, the human capital investment effect becomes stronger than the social capital investment effect.