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Aging, migration, and structural transformation in China

Author

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  • Cao, Huoqing
  • Chen, Shiyi
  • Xi, Xican

Abstract

This paper studies the interaction of laborforce aging and structural transformation in China. Empirically, laborforce aging has occurred much faster in agriculture, and rural–urban migration, the key driving force of structural transformation, was lower among old workers. We build a two-sector spatial equilibrium model featuring heterogeneous migration costs across workers. Our quantitative exercises calibrate the model to the Chinese data, implying that the higher migration costs facing old workers account for about 1/3 of laborforce aging in agriculture between 2000 and 2010. Furthermore, the aging of the aggregate labor force slows the reallocation of labor from agriculture by 1.6 percentage points.

Suggested Citation

  • Cao, Huoqing & Chen, Shiyi & Xi, Xican, 2023. "Aging, migration, and structural transformation in China," Economic Modelling, Elsevier, vol. 126(C).
    • Handle: RePEc:eee:ecmode:v:126:y:2023:i:c:s0264999323002420
    DOI: 10.1016/j.econmod.2023.106430
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    More about this item

    Keywords

    Laborforce aging; Structural transformation; Migration barriers; Spatial equilibrium;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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