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Growth led by human capital in big cities: Exploring complementarities and spatial agglomeration of the workforce with various skills

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  • Liang, Wenquan
  • Lu, Ming

Abstract

In cities, complementarity between a low-skilled and a high-skilled workforce can promote each other to improve labor productivity. In this study, we used earlier census data and 1% population survey data to examine the distribution of the skilled workforce in cities in the People's Republic of China (PRC) along with its changes, and drew the following three conclusions. First, a highly skilled workforce is the engine of urban development, increasing urban wages and population. Second, big cities can promote complementarity between skill sets so that there are greater numbers of high-skilled and low-skilled workers in those cities. This explains why both low-skilled and high-skilled workforces agglomerate in big cities. Last, complementarity between the low-skilled and high-skilled workforce is inhibited in the PRC's cities because of the biased household registration system (HRS) toward the high-skilled workforce, resulting in limited supply of low-skilled labor. This policy is not conducive to enhance labor productivity in big cities and to carry out its leading role of economic growth.

Suggested Citation

  • Liang, Wenquan & Lu, Ming, 2019. "Growth led by human capital in big cities: Exploring complementarities and spatial agglomeration of the workforce with various skills," China Economic Review, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:chieco:v:57:y:2019:i:c:s1043951x17301463
    DOI: 10.1016/j.chieco.2017.09.012
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    Citations

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    Cited by:

    1. Scott Rozelle & Yiran Xia & Dimitris Friesen & Bronson Vanderjack & Nourya Cohen, 2020. "Moving Beyond Lewis: Employment and Wage Trends in China’s High- and Low-Skilled Industries and the Emergence of an Era of Polarization," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(4), pages 555-589, December.
    2. Mingzhi Zhang & Xiangyu Zhou & Chao Chen & Jianxu Liu & Jiaxi Li & Fuying Huan & Bowen Wang, 2023. "Enterprise Spatial Agglomeration and Economic Growth in Northeast China: Policy Implications for Uneven to Sustainable Development," Sustainability, MDPI, vol. 15(15), pages 1-17, July.
    3. Yafei Xu & Guoli Ou, 2022. "Does High-Speed Railway Promote the Level of Human Capital? An Empirical Analysis Based on Three Urban Agglomerations in China," Sustainability, MDPI, vol. 14(19), pages 1-17, October.
    4. Baixue Yu & Geng Niu & Jingjing Ye & Wen‐wen Zhang, 2023. "Human capital agglomeration, institutional barriers, and internal migration in China," Growth and Change, Wiley Blackwell, vol. 54(1), pages 284-303, March.
    5. Xu, Mengmeng & Tan, Ruipeng & He, Xinju, 2022. "How does economic agglomeration affect energy efficiency in China?: Evidence from endogenous stochastic frontier approach," Energy Economics, Elsevier, vol. 108(C).
    6. Eric J. Heikkila & Ying Xu, 2022. "Polycentric Urbanization and Sustainable Development in China," Global Policy, London School of Economics and Political Science, vol. 13(S1), pages 69-78, April.
    7. Meng, Xia & Ding, Tao & Wang, Haisen, 2023. "Incentives for local government expenditures on people’s livelihood: the role of high-speed rail," Socio-Economic Planning Sciences, Elsevier, vol. 89(C).

    More about this item

    Keywords

    Human capital externality; Skill complementarity; Household registration system;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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