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City size, migration and urban inequality in China

Binkai Chen, Dan Liu and Ming Lu

China Economic Review, 2018, vol. 51, issue C, 42-58

Abstract: This paper examines the relationship between city size, migration, and urban income inequality using a subsample of the 1% population census of China in 2005. We calculate various measures of within-city income inequality for 252 Chinese cities. It is found that overall city income inequality is significantly and positively correlated with population size. As migration is crucial in determining city size distribution in China, we focus on exploring the role of massive migration into big cities in shaping this size-inequality relationship. We find that the share of migrants alone accounts for more than 40% of the city size inequality premium. This is primarily because migration leads to higher skill premiums in larger cities by changing the skill composition of workers in those places.

Keywords: City size; Income inequality; Migration; Skill premium; China (search for similar items in EconPapers)
JEL-codes: R12 O18 J31 (search for similar items in EconPapers)
Date: 2018
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China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

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