Impact of Transfer Payments on Population Migration

This chapter employs county-level data from the fifth and sixth national censuses to examine the impact of transfer payments on inter-regional population migration. To address the potential endogeneity issue associated with transfer payments, a spatial regression discontinuity design is applied. The findings suggest that regions that receive higher levels of transfer payments tend to experience greater net population outflows. Further analysis reveals the primary mechanism behind this trend: transfer payments reduce employment opportunities, result in the expansion of local administrative and fiscal support personnel and have a relatively limited effect on enhancing public goods provision. This chapter concludes that improving the efficiency of fiscal transfer payment utilization is essential.