Impact of temporary migration on long-run economic development : the legacy of the sent-down youth program

Fifty years ago, China sent more than 16 million urban youths aged 16-19 to rural villages to work and they spent between 1 and 10 years there. This is known as the "sent-down youth" (SDY) program. This paper examines how this internal migration impacted rural economic development in the regions that received a larger number of SDY per capita relative to regions that received less. We find a sizeable and persistent impact of the SDY program on real per capita GDP and nighttime light in the years after the program ended. Surprisingly, although our results confirm that the SDY increased education level of relevant cohorts, the variation in the education level of these cohorts does not seem to contribute directly to rural GDP and nighttime lights. We provide suggestive evidence regarding mechanisms through which the SDY influenced rural economic development.