The massive population flow from rural to urban areas in post-reform China is the result of both institutional and structural changes caused by economic growth. During its planned economy phase, China had a household registration system (hukou system) which was designed to control population migration and labor mobility between rural and urban areas as well as across regions. Since market-oriented reforms were instituted, controls over labor mobility have been gradually relaxed. The introduction of the Household Responsibility System (HRS) in the early 1980s allowed farmers to earn income based on effort. This paper talks about relaxation of institutional reforms to further allow for transfer of labour and while the nation losses its demographic advantage of declining rate of working population, migration could be the key to economic growth.
URL : 20131118033903.pdf