Summary:
China’s rapid urbanization has been accompanied by a substantial increase in migrant population. In the context of the country’s people-centered new urbanization strategy, which aims to integrate migrants into urban life and ensure equitable access to public services, understanding how migrant households invest in their children’s education has become critical. Education is widely viewed as a primary pathway for social integration and intergenerational mobility. However,migrant households face distinct challenges, including income volatility, limited public service access, and weakened social networks, which constrain their resource allocation decisions. This study systematically investigates three questions: whether migrant households invest more in education than local families, what drives these investment patterns, and how these investments affect children’s developmental outcomes. Using data from the 2017 and 2019 waves of the China Household Finance Survey,we find that migrant households allocate significantly more resources to education than local households, with educational expenditure 14.54 percent higher and its share in total household spending 0.68 percentage points higher, a pattern that remains robust across multiple specifications and datasets. This higher investment is accompanied by increased savings and reduced spending on discretionary consumption, indicating a reallocation toward long-term human capital formation. Mechanism analysis shows that the higher educational investment by migrant households cannot be fully explained by old-age security motives, risk-sharing considerations, or disparities in access to public educational resources. Instead, the findings suggest that concerns about children's long-term development and intergenerational mobility play an important role. First, migrant households experienced significant upward social mobility, and this experience may strengthen their belief in education as an effective pathway for success, leading to substantially higher investment. Second, the relative educational investment of migrant households, compared with that of local households, is more pronounced when they perceive their living standards to be lower than those of their relatives or neighbors. Similarly, the relative educational investment of migrant households is more pronounced in cities with limited public educational resources and among families with weaker social networks. Despite this higher investment, the study finds that, on average, migrant children do not achieve greater upward intergenerational mobility in terms of educational attainment or income compared to their local peers. This null result masks significant heterogeneity depending on the destination city’s opportunity structure. In cities with high intergenerational mobility, migrant children achieve modestly more schooling and higher income than local children, suggesting that a more favorable opportunity structure may facilitate the conversion of family educational investment into better outcomes for migrant children. This finding demonstrates that the returns to educational investment are highly contingent on the institutional context; in cities with limited opportunities for upward mobility, greater family educational investment may not be sufficient to overcome the constraints faced by migrant children. This study makes three key contributions. First, it systematically analyzes the motivations and outcomes of educational investment among migrant households in China, revealing the long-term effectiveness of such investment and its critical dependence on socio-environmental factors, thereby offering important theoretical insights and empirical support for understanding the complex relationship between migrant families’ educational behavior and intergenerational mobility. Second, it identifies key mechanisms that significantly influence migrant households’ investment decisions, including beliefs about the returns to education shaped by past upward mobility, social comparison with relatives and neighbors, and external support in the form of public educational resources and informal social networks, adding to the literature on household financial decision-making and educational investment while providing a novel explanation for the drivers of migrant educational investment. Third, by focusing on the process of people-centered urbanization, it examines how migrant households adjust resource allocation to cope with socioeconomic challenges in destination cities, extending existing research on migration and educational investment and offering policy insights for facilitating migrant integration and achieving sustainable urban development.
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