Low-Skilled Immigrants and Urban Development? in China: A Labor Market Perspective*

Chao Liang () and Susu Wang ()
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Chao Liang: Center for Economic Research Shandong University No. 27 Shanda South Road Jinan 250100, China
Susu Wang: Shanghai Customs College No. 5677 Huaxia West Road Shanghai 201204, China

Asian Economic Papers, 2020, vol. 19, issue 1, 114-128

Abstract: This study investigates the impact of low-skilled immigrants on urban labor markets in China. Using historical migration networks as an instrumental variable to overcome endogeneity problems, we find that low-skilled immigrants significantly increase local wages. Census data reveal significant occupational segregation between low-skilled immigrants and local inhabitants. Low-skilled immigrants are found to substitute for low-skilled local inhabitants but are complementary for high-skilled local inhabitants. In addition, low-skilled immigrants boost women's labor participation and wages through consumption service markets. This study's findings reveal that discrimination against low-skilled immigrants weakens the reciprocal effects among immigrants and local inhabitants and hinders urban development.

Date: 2020
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