Inclusive Urban Employment: How Does City Scale Affect Job Opportunities for Different People?

Hong Gao (), Ming Lu () and Hiroshi Sato ()
Additional contact information
Hong Gao: Department of Economics Fudan University
Ming Lu: Department of Economics Shanghai Jiaotong University

Asian Economic Papers, 2015, vol. 14, issue 2, 98-128

Abstract: This paper investigates the influence of city scale on employment using data from China. Probit models of employment determination are estimated. The historical population growth during China's planned economy, when migration was directed by the government and voluntary location choice was prohibited, is used as the instrumental variable of current population size. Instrumental variables estimates show that it is more likely for individuals to gain employment in big cities. A 1 percent increase in city scale increases one's employment probability by between 0.044 and 0.050 percentage points. Moreover, the scale advantage of big cities is heterogeneous among individuals with different levels of human capital, with the least-skilled workers benefiting the most.

Keywords: employment opportunitities; China; employment determination; migration; cities; city scale (search for similar items in EconPapers)
JEL-codes: J40 O53 (search for similar items in EconPapers)
Date: 2015
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