1. The document analyzes the impact of remittances from rural-urban migration on consumption patterns and savings in rural China using large household surveys. 2. Fixed effects instrumental variable regressions show remittances have a high marginal propensity to consume for non-housing expenditures like food and transport. 3. Two-stage least squares regressions accounting for endogeneity also find remittances are largely used for consumption rather than savings. Remittances help alleviate credit constraints for new migrants.

1. Understanding the Impact of Remittances on Consumption Patterns and Savings in Rural China Yu Zhu (University of Kent, CEE) Zhongmin Wu (Nottingham Trent University) Liquan Peng, Laiyun Sheng (National Bureau of Statistics of China) Meiyan Wang, Yang Du, Fang Cai (Chinese Academy of Social Sciences) Institute of Development Studies, January 15 th 2009 Acknowledgement : We are grateful to the British Academy for funding this research.

14. Map 31/07/09 Yu Zhu - University of Kent

20. Sources of HH Net Income by Province and Year 31/07/09 Yu Zhu - University of Kent

21. Balanced Panel of 105 Counties 31/07/09 Yu Zhu - University of Kent

24. OLS, FE and IV Results 31/07/09 Yu Zhu - University of Kent

39. OLS Results 31/07/09 Yu Zhu - University of Kent