E2022010                                                                                            2025-08-04

Ying Deng and Xiangjun Ma

Abstract

Internal migrants plays a pivotal role in shaping the labor geography in China. However, insufficient attention has been paid to the heterogeneity of internal migrants, particularly regarding their employment types at the destination after migration. This paper studies the impact of co-villager networks on the self-employment propensity of internal migrants in China. We employ a unique nationwide survey data of internal migrants and report comprehensive statistics of internal migrants’ self-employment patterns in various dimensions. In particular, we observe large variation of self-employment rates of migrants from different home provinces. Applying the spatial autoregressive (SAR) linear probability model, we find that internal migrants are more likely to become own-account self-employed if their co-villagers are also own-account self-employed and that self-employment decision is not only affected by self-employed co-villagers in the same industry, but also by those in other industries. Moreover, the network has robustly positive effects in certain industries such as wholesale and retail and construction industry. Our results indicate that co-villager networks could help migrants build skills required in a sector and share information, such as tactics of running a business, certain channels of product supply, changes of market demand, etc. This paper fills the literature gap by offering empirical evidence on the co-villager network effect on migrants’ self-employment in developing countries.

Keywords: Own-Account Self-Employed, Co-Villager Network, SAR, Internal Migrants

JEL Classifications: R23; C21; L26

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