International Migration and Development: The Case of China Zai Liang and Hideki Morooka State University of New York at Albany This project is supported by grants from NSF, NICHD, and the Ford Foundation.

How International Migration Affects Development? Earlier studies, summarized by Taylor et al. (1996) “emigration undermines the prospects of economic growth.” Productive vs. non- productive use of remittances. Earlier studies, summarized by Taylor et al. (1996) “emigration undermines the prospects of economic growth.” Productive vs. non- productive use of remittances. Taylor (1999), from the perspective of new economics of migration, argues that Taylor (1999), from the perspective of new economics of migration, argues that –Migration decisions are part of family strategies to obtain funds and to insure against income and production risk. and Massey and his associates. –Remittances, set in motion a development dynamic by loosening production and investment constraints. Using data from MMP, Massey and his associates suggest that we pay more attention to conditions under which remittances can be used in productive way. Using data from MMP, Massey and his associates suggest that we pay more attention to conditions under which remittances can be used in productive way.

International Migration and Development (Continued) One of the most important insights from this line of reasoning is that remittances have indirect effect on the local economy.One of the most important insights from this line of reasoning is that remittances have indirect effect on the local economy. Consumption by migrant households generates demand for different goods (garment, appliances, eateries and entertainment…).Consumption by migrant households generates demand for different goods (garment, appliances, eateries and entertainment…). Spending on housing generates demand for house-building materials. (especially important in the Chinese context).Spending on housing generates demand for house-building materials. (especially important in the Chinese context).

Objectives of the Current Research Join this debate by using newly collected data from China’s Fujian province.Join this debate by using newly collected data from China’s Fujian province. Focus on remittances.Focus on remittances. Size of remittances is big ($88 billion in 2002, International Org. of Migration).Size of remittances is big ($88 billion in 2002, International Org. of Migration). In one of the migrant-sending regions, Changle, $460 million in 2003.In one of the migrant-sending regions, Changle, $460 million in Examine determinants of amount of remittances, and determinants of how remittances were used.Examine determinants of amount of remittances, and determinants of how remittances were used.

Research Design This project is modeled on the success of Mexican Migration Project, directed by Douglas S. Massey and Jorge Durand.This project is modeled on the success of Mexican Migration Project, directed by Douglas S. Massey and Jorge Durand. In Fujian province, we selected eight towns that are known to send emigrants to the U.S. For each town, we sampled roughly 200 households using multi- stage sampling technique. In Fujian province, we selected eight towns that are known to send emigrants to the U.S. For each town, we sampled roughly 200 households using multi- stage sampling technique. In New York metro area, we interviewed immigrants who came from each of the eight towns. The total U.S. sample size is 410. In New York metro area, we interviewed immigrants who came from each of the eight towns. The total U.S. sample size is 410.

Household and Community Questionnaires Household questionnaire: (1) Basic socio-demographic information for each person in the household (including individuals who emigrated). (2) Detailed information on internal and international migration is collected for individual who has had migration experience. In particular we have detailed information on the first and last international migration experience. (3) Life history data are collected for both household heads and spouses covering information such as employment history, marriage history, and migration history. (4) Household property ownership for each household. Information such as ownership of land, house and other properties.Household questionnaire: (1) Basic socio-demographic information for each person in the household (including individuals who emigrated). (2) Detailed information on internal and international migration is collected for individual who has had migration experience. In particular we have detailed information on the first and last international migration experience. (3) Life history data are collected for both household heads and spouses covering information such as employment history, marriage history, and migration history. (4) Household property ownership for each household. Information such as ownership of land, house and other properties. Community questionnaire: immigration history, infrastructure, remittances, and buildings/schools/senior center financed by remittances.Community questionnaire: immigration history, infrastructure, remittances, and buildings/schools/senior center financed by remittances.

Why Study Fujian Province? The rise of emigration from Fujian. Destination countries: U.S., Europe, and Japan.The rise of emigration from Fujian. Destination countries: U.S., Europe, and Japan. Comparative study of China and Mexico.Comparative study of China and Mexico.

The Main Innovations of the Study Broaden the concept of “productive investment” to include public projects such as supporting local educational initiatives (schools and scholarships), infrastructure/building roads, dam, senior citizen center, culture/performance theater. Broaden the concept of “productive investment” to include public projects such as supporting local educational initiatives (schools and scholarships), infrastructure/building roads, dam, senior citizen center, culture/performance theater. Detailed information on remittances last year and cumulative remittances over the course of migration. Detailed information on remittances last year and cumulative remittances over the course of migration.

Map 1. Location of Fujian Province in China

Map 2. Major Emigrant-Sending Regions in Fujian Province, China

Investment in Local Education

Community Infrastructure

Flow of Remittances

Average Previous Year Remittance Amount by Duration of Stay Overseas

Average Cumulative Amount of Remittances by Duration of Stay Overseas

How Remittances from Abroad were Spent

How Spending Patterns Change Over Time

Logistic Regression Models Predicting whether an Emigrant Has Ever Remitted

OLS Regression Models Predicting Remittances Amount in Previous Year

Logistic Regression Models Predicting whether Remittances were Spent on Local Education or Public Projects

Concluding Remarks Large amount of remittance led to major indirect effect on local economy.Large amount of remittance led to major indirect effect on local economy. Going beyond our data and beyond migrant-sending communityGoing beyond our data and beyond migrant-sending community Steel mills in other provinces (construction boom)Steel mills in other provinces (construction boom) Brick factoriesBrick factories Investment in real estimate market in nearby cities (such as Fuzhou city).Investment in real estimate market in nearby cities (such as Fuzhou city). Business activities, not the only yardstick for development. Investment in education and local public projects.Business activities, not the only yardstick for development. Investment in education and local public projects.

Large Picture: Overseas Chinese and China’s Development China’s special economic zones (Shenzhen, Zhuhai, Shantou, and Xiamen). China’s special economic zones (Shenzhen, Zhuhai, Shantou, and Xiamen). During , overseas Chinese investment accounted for 66% of FDI. This built fundamental confidence on investing in China, encouraging other big companies to go to China. Thus if one takes a long view, the story is very promising. During , overseas Chinese investment accounted for 66% of FDI. This built fundamental confidence on investing in China, encouraging other big companies to go to China. Thus if one takes a long view, the story is very promising.