>This study explores the decisions of migration by rural households in rural China using a household survey in Sichuan province. It is revealed that the shortage of farm land and the abundance of household labor are among the most important determinants of labor migration，local taxation increases out-migration，and local nonfarm employment reduces the incentive for migration. Furthermore，it is found that rural households view incomes from migration as transient incomes since these incomes had very small impact on rural consumption. This implies that rural people do not have a stable expectation about working in urban areas. Possible reasons are（1）they do not intend to give up farm land for no payment and（2）they are unable to gain permanent resident status in cities and receive equal educational opportunities for their children. These institutions and policies have undoubtedly made urbanization in China a much slower process than it would be otherwise.