low returns to local economic activity, reinforcing geographic poverty traps (Jalan and Ravallion, 2002). A considerable body of descriptive evidence related to the growth of migration in China raises the possibility that migrant opportunity may be an important mechanism for poverty reduction. Studies of the impact of migration on migrant households suggest that migration is associated with higher incomes (Taylor, Rozelle and de Brauw, 2003; Du, Park, and Wang, 2006), facilitates risk-coping and risk-management (Giles, 2006; Giles and Yoo, 2007), and is associated with higher levels of local investment in productive activities (Zhao, 2002).

The use of migrant networks and employment referral in urban areas are important dimensions of China’s rural-urban migration experience. Rozelle et al (1999) emphasize that villages with more migrants in 1988 experienced more rapid migration growth by 1995. Zhao (2003) shows that number of early migrants from a village is correlated with the probability that an individual with no prior migration experience will choose to participate in the migrant labor market. Meng (2000) further suggests that variation in the size of migrant flows to different destinations can be partially explained by the size of the existing migrant population in potential destinations.<sup>7</sup> Descriptive evidence from a survey of migrants living in urban China confirms the likely importance of migrant networks for lowering the cost of finding employment. In a survey of rural migrants conducted in five of China’s largest cities in late 2001, more than half of the migrants reported that they secured employment before their first migration experience, and more than 90 percent had an acquaintance from their home village living in the city when arriving (Table 1).<sup>8</sup> Notably, before migrating over half of migrants surveyed had a member of their extended family living in the city, and over 65 percent knew hometown acquaintances in the city other than family members.<sup>9</sup>

> 7 Referral through one’s social network is a common method of job search in both the developing and developed world. Carrington, Detragiache, and Vishnawath (1996) explicitly show that in a model of migration, moving costs can decline with the number of migrants over time, even if wage differentials narrow between source communities and destinations. Survey-based evidence suggests that roughly 50 percent of new jobs in the US are found through referrals facilitated by social networks (Montgomery, 1991). In a study of Mexican migrants in the US, Munshi (2003) shows that having more migrants from one’s own village living in the same city increases the likelihood of employment.

> 8 We use the migrant sub-sample of the China Urban Labor Survey (CULS), which was conducted in late 2001 by the Institute for Population and Labor Economics at the Chinese Academy of Social Sciences (CASS-IPLE) working in collaboration with local National Bureau of Statistics Survey Teams. Researchers from Michigan State University and the University of Michigan collaborated in funding, designing, implementing and monitoring the survey. Using the 2000 Population Census as a guide, neighborhoods were selected using a proportional population sampling procedure. Sample frames were then assembled from residents’ committee records of migrant households, and public security bureau records of migrants living on construction sites. Very short-term migrants are unlikely to have been included in the sample frame.

> 9 Categories of acquaintance type shown in Table 1 are not exclusive because many migrants were preceded to cities by both family members and other hometown acquaintances.

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