Internal migrants, skill complementarity and wage premium for local workers: a micro econometric analysis of Chinese households

Weiping Wu, Yuxuan Yang, Leyan Su, Yuwei Sun and Tuozhi Liu

Journal of the Asia Pacific Economy, 2025, vol. 30, issue 3, 1088-1111

Abstract: China’s rapid urbanization has been driven by large-scale internal migrants, and it is worth exploring the impact of internal migrants on local labor markets. Based on data from China’s population census, population sample survey and urban household survey, this study empirically tests the wage premium effect of internal migrants on local labor, and further investigates the mechanisms of wage premium from skill complementarity, as well as the policy adjustment effect of labor market reforms. The results show that: (1) The wage premium effect originating from migrants is significant, and gradually decreases over time and with the increase of local worker wages. (2) The wage premium effect is more prominent in large cities, mega and super-sized cities, which can be explained by economic agglomeration and division of labor induced by skill complementarities. (3) Labor market-oriented reforms contribute to enhancing the wage premium effect, with marginal effects of 3.71% and 3.64%.

Date: 2025
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DOI: 10.1080/13547860.2024.2344237

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