A Study on Governmental Aid of Rural-Urban Migration of Poverty Peasants

China has a large number of agricultural populations. Among them, poverty peasants account for an explicit part. Since 1978, Chinese anti-poverty efforts continuously implement and deepen, till now it has achieved a great success. However, its poverty peasants still exceed twenty million persons. To make a living, more and more poverty peasants leave home for job in urban areas. Among them, voluntary migration dominates the types of rural-urban migration. In fact, it is a challenge for migrant poverty peasants to survive in urban labor market. Labor supply from household in poverty is different from that from wealthy household. The rural poverty family maximizes utility subject to a time constraint, a subsistence constraint, and the habitual budget constraint. We develop a two-region model of rural-urban migration and analyze the effect of governmental aid on rural-urban migration. We find that an additional governmental aid to poverty areas increases rural-urban migration when the initial level of aid is small and the direct cost of migration is high, but it reduces rural-urban migration when the initial level of aid is high. Some useful suggestions are provided finally.