IDEAS home Printed from https://ideas.repec.org/a/bla/rdevec/v27y2023i1p423-449.html
   My bibliography  Save this article

Effect of goods market segmentation on labor mobility: Evidence from China

Author

Listed:
  • Dongmei Guo
  • Die Hu
  • Weizeng Sun

Abstract

This study empirically investigates the effects of goods market segmentation on interregional labor mobility using data from National Population Surveys in China. The findings reveal that a one‐standard deviation increase in the goods market segmentation index reduces interprovincial migration by 4.0%. Restraining interregional trade and improving industrial specialization are the two mechanisms at work. Further analysis indicates that the restrictive effect of goods market segmentation is greater on highly educated laborers and the labor flows from poorer to richer regions. The heterogeneous analysis also implies that migrants are more concerned about educational resources and consumption diversity.

Suggested Citation

  • Dongmei Guo & Die Hu & Weizeng Sun, 2023. "Effect of goods market segmentation on labor mobility: Evidence from China," Review of Development Economics, Wiley Blackwell, vol. 27(1), pages 423-449, February.
    • Handle: RePEc:bla:rdevec:v:27:y:2023:i:1:p:423-449
    DOI: 10.1111/rode.12925
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/rode.12925
    Download Restriction: no
    File URL: https://libkey.io/10.1111/rode.12925?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Oded Galor & Andrew Mountford, 2006. "Trade and the Great Divergence: The Family Connection," American Economic Review, American Economic Association, vol. 96(2), pages 299-303, May.
    2. Panle Jia Barwick & Shengmao Cao & Shanjun Li, 2021. "Local Protectionism, Market Structure, and Social Welfare: China's Automobile Market," American Economic Journal: Economic Policy, American Economic Association, vol. 13(4), pages 112-151, November.
    3. Berry, Christopher R. & Glaeser, Edward L., 2005. "Divergence of Human Capital Levels across Cities," Working Paper Series rwp05-057, Harvard University, John F. Kennedy School of Government.
    4. David Dorn & Josef Zweimüller, 2021. "Migration and Labor Market Integration in Europe," Journal of Economic Perspectives, American Economic Association, vol. 35(2), pages 49-76, Spring.
    5. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    6. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    7. Giri, Rahul, 2012. "Local costs of distribution, international trade costs and micro evidence on the law of one price," Journal of International Economics, Elsevier, vol. 86(1), pages 82-100.
    8. Fraumeni, Barbara M. & He, Junzi & Li, Haizheng & Liu, Qinyi, 2019. "Regional distribution and dynamics of human capital in China 1985–2014," Journal of Comparative Economics, Elsevier, vol. 47(4), pages 853-866.
    9. Dequiedt, Vianney & Zenou, Yves, 2013. "International migration, imperfect information, and brain drain," Journal of Development Economics, Elsevier, vol. 101(C), pages 117-132.
    10. Lorenzo Caliendo & Luca David Opromolla & Fernando Parro & Alessandro Sforza, 2021. "Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement," Journal of Political Economy, University of Chicago Press, vol. 129(12), pages 3491-3545.
    11. Majlesi, Kaveh & Narciso, Gaia, 2018. "International import competition and the decision to migrate: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 132(C), pages 75-87.
    12. Poncet, Sandra, 2006. "Provincial migration dynamics in China: Borders, costs and economic motivations," Regional Science and Urban Economics, Elsevier, vol. 36(3), pages 385-398, May.
    13. Bryan, Gharad & Morten, Melanie, 2019. "The aggregate productivity effects of internal migration: evidence from Indonesia," LSE Research Online Documents on Economics 88177, London School of Economics and Political Science, LSE Library.
    14. Dittmar, Jeremiah E. & Meisenzahl, Ralf R., 2020. "Public goods institutions, human capital, and growth: evidence from German history," LSE Research Online Documents on Economics 91195, London School of Economics and Political Science, LSE Library.
    15. Roberto Ezcurra, 2011. "Unemployment Volatility and Regional Specialization in the European Union," Regional Studies, Taylor & Francis Journals, vol. 45(8), pages 1121-1137.
    16. Guriev, Sergei & Vakulenko, Elena, 2015. "Breaking out of poverty traps: Internal migration and interregional convergence in Russia," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 633-649.
    17. Trevor Tombe & Xiaodong Zhu, 2019. "Trade, Migration, and Productivity: A Quantitative Analysis of China," American Economic Review, American Economic Association, vol. 109(5), pages 1843-1872, May.
    18. Zuocheng Chen & Krishna P. Paudel, 2021. "Economic openness, government efficiency, and urbanization," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1351-1372, August.
    19. Fu, Yuming & Gabriel, Stuart A., 2012. "Labor migration, human capital agglomeration and regional development in China," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 473-484.
    20. Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2010. "Inequality and Unemployment in a Global Economy," Econometrica, Econometric Society, vol. 78(4), pages 1239-1283, July.
    21. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," NBER Working Papers 7828, National Bureau of Economic Research, Inc.
    22. Brian C. Cadena & Brian K. Kovak, 2016. "Immigrants Equilibrate Local Labor Markets: Evidence from the Great Recession," American Economic Journal: Applied Economics, American Economic Association, vol. 8(1), pages 257-290, January.
    23. Wiens, Thomas B., 1987. "Issues in the structural reform of Chinese agriculture," Journal of Comparative Economics, Elsevier, vol. 11(3), pages 372-384, September.
    24. Anil Rupasingha & Alexander W Marré, 2020. "Moving to the hinterlands: agglomeration, search costs and urban to rural business migration," Journal of Economic Geography, Oxford University Press, vol. 20(1), pages 123-153.
    25. Parsley, David C. & Wei, Shang-Jin, 2001. "Explaining the border effect: the role of exchange rate variability, shipping costs, and geography," Journal of International Economics, Elsevier, vol. 55(1), pages 87-105, October.
    26. Poncet, Sandra, 2003. "Measuring Chinese domestic and international integration," China Economic Review, Elsevier, vol. 14(1), pages 1-21.
    27. Ding, Chengri & Niu, Yi, 2019. "Market size, competition, and firm productivity for manufacturing in China," Regional Science and Urban Economics, Elsevier, vol. 74(C), pages 81-98.
    28. Ying Ge & Yin He & Yeheng Jiang & Xiaopeng Yin, 2014. "Border Trade and Regional Integration," Review of Development Economics, Wiley Blackwell, vol. 18(2), pages 300-312, May.
    29. Zhongda Li & Jianhao Lin & Lu Liu, 2020. "Occupational attainment and stratification in China: The interactive effects of social networks and the hukou system," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 1167-1192, August.
    30. Christopher R. Berry & Edward L. Glaeser, 2005. "The divergence of human capital levels across cities," Papers in Regional Science, Wiley Blackwell, vol. 84(3), pages 407-444, August.
    31. David Hummels & Rasmus J?rgensen & Jakob Munch & Chong Xiang, 2014. "The Wage Effects of Offshoring: Evidence from Danish Matched Worker-Firm Data," American Economic Review, American Economic Association, vol. 104(6), pages 1597-1629, June.
    32. Margaret E Peters, 2020. "Integration and Disintegration: Trade and Labor Market Integration," Journal of International Economic Law, Oxford University Press, vol. 23(2), pages 391-412.
    33. Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels across Cities," Harvard Institute of Economic Research Working Papers 2091, Harvard - Institute of Economic Research.
    34. Burzynski, Michal & Deuster, Christoph & Docquier, Frédéric, 2020. "Geography of skills and global inequality," Journal of Development Economics, Elsevier, vol. 142(C).
    35. Yu Na Lee, 2021. "Does Aversion to Price Risk Drive Migration? Evidence from Rural Ethiopia," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1268-1293, August.
    36. Jeremiah E Dittmar & Ralf R Meisenzahl, 2020. "Public Goods Institutions, Human Capital, and Growth: Evidence from German History," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(2), pages 959-996.
    37. Zhang, Huafeng, 2010. "The Hukou system's constraints on migrant workers' job mobility in Chinese cities," China Economic Review, Elsevier, vol. 21(1), pages 51-64, March.
    38. Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels Across Cities," NBER Working Papers 11617, National Bureau of Economic Research, Inc.
    39. repec:hal:spmain:info:hdl:2441/29rpk7q0oq98a9ckfivpgfdvo0 is not listed on IDEAS
    40. Gharad Bryan & Melanie Morten, 2019. "The Aggregate Productivity Effects of Internal Migration: Evidence from Indonesia," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2229-2268.
    41. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(4), pages 1091-1135.
    42. Dongxiao Niu & Weizeng Sun & Siqi Zheng, 2020. "Travel costs, trade, and market segmentation: Evidence from China's high‐speed railway," Papers in Regional Science, Wiley Blackwell, vol. 99(6), pages 1799-1825, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Howard, Greg & Liebersohn, Jack, 2021. "Why is the rent so darn high? The role of growing demand to live in housing-supply-inelastic cities," Journal of Urban Economics, Elsevier, vol. 124(C).
    2. Selod, Harris & Shilpi, Forhad, 2021. "Rural-urban migration in developing countries: Lessons from the literature," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    3. Lee, Jun Yeong & Winters, John, 2021. "Too Cold to Venture There? January Temperature and Immigrant Self-Employment across the United States," ISU General Staff Papers 202112131848540000, Iowa State University, Department of Economics.
    4. Fabian Eckert & Sharat Ganapati & Conor Walsh, 2020. "Urban-Biased Growth: A Macroeconomic Analysis," CESifo Working Paper Series 8705, CESifo.
    5. Benjamin Austin & Edward Glaeser & Lawrence Summers, 2018. "Jobs for the Heartland: Place-Based Policies in 21st-Century America," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 49(1 (Spring), pages 151-255.
    6. Maximilian v. Ehrlich & Henry G. Overman, 2020. "Place-Based Policies and Spatial Disparities across European Cities," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 128-149, Summer.
    7. Katheryn N. Russ & Jay C. Shambaugh & Sanjay R. Singh, 2023. "Currency Areas, Labor Markets, and Regional Cyclical Sensitivity," Working Paper Series 2023-22, Federal Reserve Bank of San Francisco.
    8. Ben Armstrong, 2021. "Industrial Policy and Local Economic Transformation: Evidence From the U.S. Rust Belt," Economic Development Quarterly, , vol. 35(3), pages 181-196, August.
    9. Zheng, Yilin & Lu, Ming & Li, Jiewei, 2022. "Internal circulation in China: Analyzing market segmentation and integration using big data for truck traffic flow," Economic Modelling, Elsevier, vol. 115(C).
    10. Eckert,Fabian & Kleineberg,Tatjana Karina, 2021. "Saving the American Dream ? Education Policies in Spatial General Equilibrium," Policy Research Working Paper Series 9574, The World Bank.
    11. Eliasson, Kent & Hansson, Pär & Lindvert, Markus, 2019. "Regional employment effects of MNE offshoring," Working Papers 2019:1, Örebro University, School of Business.
    12. Greg Howard & Jack Liebersohn, 2023. "Regional Divergence and House Prices," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 49, pages 312-350, July.
    13. Lena Edlund & Cecilia Machado & Maria Sviatschi, 2022. "Gentrification and the Rising Returns to Skill," Economica, London School of Economics and Political Science, vol. 89(354), pages 258-292, April.
    14. Fu, Yuming & Gabriel, Stuart A., 2012. "Labor migration, human capital agglomeration and regional development in China," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 473-484.
    15. Albanese, Giuseppe & Carrieri, Vincenzo & Speziali, Maria Maddalena, 2021. "Looking for a Star: Evaluating the Effect of the Cohesion Policy on Regional Well-Being," IZA Discussion Papers 14521, Institute of Labor Economics (IZA).
    16. Kristian Behrens & Frédéric Robert-Nicoud, 2009. "Survival of the Fittest in Cities: Agglomeration, Polarization, and Income Inequality," Cahiers de recherche 0919, CIRPEE.
    17. Maximilian Buchholz & Harald Bathelt & John A. Cantwell, 2020. "Income divergence and global connectivity of U.S. urban regions," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 229-248, September.
    18. David H. Autor, 2019. "Work of the Past, Work of the Future," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 1-32, May.
    19. Maximilian Buchholz & Harald Bathelt & John A. Cantwell, 0. "Income divergence and global connectivity of U.S. urban regions," Journal of International Business Policy, Palgrave Macmillan, vol. 0, pages 1-20.
    20. Xin Fan & Shan Jin & Zeyu Chen, 2023. "Who Benefits from Domestic Market Integration?," Journal of Happiness Studies, Springer, vol. 24(6), pages 2083-2109, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:rdevec:v:27:y:2023:i:1:p:423-449. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.