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Trade, Migration and Productivity: A Quantitative Analysis of China

Trevor Tombe () and Xiaodong Zhu ()

Working Papers from University of Toronto, Department of Economics

Abstract: We study how misallocation due to goods- and labour-market frictions affect aggregate productivity in China. Combining unique data with a general equilibrium model of internal and international trade, and migration across regions and sectors, we quantify the magnitude and consequences of trade and migration costs. The costs were high in 2000, but declined afterward. The decline accounts for roughly two-fifths of aggregate labour productivity growth in China between 2000 and 2005. Reductions in internal rather than international costs are particularly important. Despite the decline, migration costs are still high and potential gains from further reform are large.

Keywords: migration; internal trade; spatial misallocation; gains from trade; aggregate productivity; China (search for similar items in EconPapers)
JEL-codes: F1 F4 R1 O4 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2015-06-20
New Economics Papers: this item is included in nep-cna, nep-eff, nep-geo, nep-int, nep-mig and nep-tra
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Related works:
Journal Article: Trade, Migration, and Productivity: A Quantitative Analysis of China (2019) Downloads
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