Urbanization and/or rural industrialization in China
AbstractWe study urbanization and rural industrialization in a setting involving one urban region (U) and one rural region (R). Farmers are heterogeneous in their attitude toward migration, while firms' efficiency is higher in U than in R because agglomeration economies have been built in U. Farmers face three options: (i) working in the agricultural sector, (ii) setting up firms in R, or (iii) moving to U. There exists a unique equilibrium, which displays four different patterns. In the first one, both urbanization and rural industrialization occur simultaneously. In the second and third patterns, either urbanization or rural industrialization arises, whereas the last pattern involves an industrial core and an agricultural periphery. The conditions under which each pattern emerges are determined. The transfer of labor from the agricultural to the industrial sector always increases farmers' welfare, while the welfare impact on incumbent urban workers is ambiguous.
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Bibliographic InfoArticle provided by Elsevier in its journal Regional Science and Urban Economics.
Volume (Year): 42 (2012)
Issue (Month): 1-2 ()
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Urbanization; Rural industrialization; New economic geography;
Find related papers by JEL classification:
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - 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)
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
- R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
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