As massive rural residents leave their home countryside for better employment, migration
has profound effects on income distributions such as rural-urban income gap and inequalities
within rural or urban areas. The nature of the effects depends crucially on who are migrating
and their migrating patterns. In this paper, we emphasize two facts. First, rural residents are
not homogeneous, they self-select to migrate or not. Second, there are significant differences
between migrants who successfully transformed their hukou status (permanent migrants) and
those did not (temporary migrants). Using three coordinated CHIP data sets in 2002, we find
that permanent migrants are positively selected from rural population especially in terms of
education. As permanent migration takes more mass from the upper half of rural income
density, both rural income level and inequalities decrease, the urban-rural income ratio
increases at the same time. On the contrary, the selection effect of temporary migrants is
almost negligible. It does not have obvious effect on rural income level and inequalities.