Geography, trade, and internal migration in China

Lin Ma and Yang Tang

Journal of Urban Economics, 2020, vol. 115, issue C

Abstract: This paper quantitatively studies the local welfare impacts of inter-city migration in China. We structurally estimate a trade model with endogenous migration decisions using data from 279 prefecture-level cities. The results suggest that inflows of migrant workers increase welfare in the destination cities between 2000 and 2005 despite their negative impacts on congestion and nominal wage. The positive local impacts of migration depend crucially on the endogenous firm entry. The positive impacts in the destination cities also spill over to the neighboring cities through inter-city trade, often leading to higher welfare gains in the nearby cities than the destination cities themselves. We also show that further relaxing the Hukou restrictions in the largest Chinese cities is welfare-improving to the local residents.

Keywords: Regional trade; Migration; Welfare; Economic geography (search for similar items in EconPapers)
JEL-codes: F1 F4 O4 R1 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:115:y:2020:i:c:s0094119019300506

DOI: 10.1016/j.jue.2019.06.004

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