The welfare system can be a crucial factor in the urban settlement of rural migrants, but its effects are difficult to determine because to do so one must distinguish the effect of welfare entitlement from the effect of ‘migrant selectivity bias’, which widely exists in cities in developing countries. Using survey data from 15 Chinese cities, this study examines the ways in which social insurance – the most critical social welfare package in China – affects rural migrants’ urban-settlement intentions. The results show that there is a ‘migrant selectivity bias’ in Chinese cities, that is, rural migrants who are better off socio-economically are more inclined to participate in social insurance and are more inclined to pursue permanent urban settlement. Meanwhile, social insurance participation is significantly and positively related to rural migrants’ urban-settlement intentions, and this positive relation remains even after we discount the effect of ‘migrant selectivity bias’ in the analysis. We argue that, for rural migrants in China, the effect of social insurance participation on urban settlement intentions closely resembles that experienced by those who move to migration-managed regimes. We conclude that the Chinese government should establish a more inclusive social welfare system to enable rural migrants to permanently settle in cities.
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