City Size and Permanent Settlement Intention: Evidence from Rural-Urban Migrants in China

The location choice and livelihoods of rural-urban migrants are critical to the sustainable development of cities. By using data from the China Migrants Dynamic Survey (CMDS) in 2017, this paper extant the Rosen-Roback's model by adding factors of urban social network and air pollution to the function of the individual utility of migrants. Both the Probit Model and IV estimates imply evidence of an inverse U-shaped pattern of city size and migrants' permanent settlement in urban China. This view proves that Chinese migrants like to settle permanently in large cities, but not mega-cities, such as Beijing and Shanghai. The internal mechanism is explained by the agglomeration economies and the crowing effect brought by city size. In mega-cities, the attractiveness of the city caused by wage premium cannot offset the combined repulsive force caused by the high housing price, bad urban social network, air pollution, and health deterioration. It is worth noting that air pollution has a significant negative impact on the settlement intention of migrants, such as health conditions and precipitation. Besides, there is heterogeneity among high-skilled migrants and low-skilled migrants in different city sizes. Our findings enhance the understanding of "Escape from megacities" in China and have implications for the reform of the housing security system and the exploration of the urbanization path.