Conghan Zheng

Parental migration and family separation are key factors affecting the outcomes of the next generation. This paper examines the joint household decision of parental rural-urban migration and children's education in China, where the Hukou system restricts migrants' access to urban public services. I develop a nested discrete choice model that incorporates expected returns to children's education as part of the parental migration decision. Estimation results using household panel data show that rural parents migrate for better educational opportunities for their children and a wage premium, avoiding high costs but still concentrating in the most restrictive and congested destinations. Counterfactual analyses suggest that education subsidies at the rural origin of migrants are more effective than subsidies at the destination, or even a universal subsidy, in reducing family separation and improving children's school performance. And all education subsidies are more effective than mobility restrictions in controlling migration flows without harming the usually hidden but highly vulnerable group in labor migration - children, suggesting that policies targeting the motivation for migration are more effective than mobility frictions in controlling migration.