IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i4p3490-d1068070.html
   My bibliography  Save this article

Is China’s Urbanization Inclusive?—Comparative Research Based on Machine Learning Algorithms

Author

Listed:
  • Zhipeng Gao

    (College of Economics and Management, Shenyang Agricultural University, Shenyang 110866, China)

  • Zhenyu Wang

    (Local Finance Research Institute of Liaoning University, Shenyang 110366, China)

  • Mi Zhou

    (College of Economics and Management, Shenyang Agricultural University, Shenyang 110866, China)

Abstract

Improving the inclusiveness of urban development is crucial to improving the wages of low- and middle-income workers. In this study, we used machine learning to cluster urban labor into low, middle, and high socioeconomic groups in order to analyze the effects of economic agglomeration and compare them with the results, which were classified according to income. The results showed that economic agglomeration has improved the wages of the low and middle socioeconomic groups; the estimated wage spillover effect was 3.9%. By contrast, the estimated result based on the groups classified by a single index of income was 20.3%, which represents an overestimation of the wage spillover effect of economic agglomeration. This method is often used to explain the inclusiveness of China’s urbanization, leading to overestimation. Further mechanism analysis found that the characteristics of the industrial structure affect the change in wage elasticity caused by economic agglomeration, which has a moderating effect on the wages of workers. The differing wage elasticity associated with economic agglomeration is responsible for wage disparities in China.

Suggested Citation

  • Zhipeng Gao & Zhenyu Wang & Mi Zhou, 2023. "Is China’s Urbanization Inclusive?—Comparative Research Based on Machine Learning Algorithms," Sustainability, MDPI, vol. 15(4), pages 1-16, February.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:4:p:3490-:d:1068070
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/4/3490/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/4/3490/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Du, Yang & Park, Albert & Wang, Sangui, 2005. "Migration and rural poverty in China," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 688-709, December.
    2. Combes, Pierre-Philippe & Démurger, Sylvie & Li, Shi & Wang, Jianguo, 2020. "Unequal migration and urbanisation gains in China," Journal of Development Economics, Elsevier, vol. 142(C).
    3. Fu, Shihe & Liao, Yu & Zhang, Junfu, 2016. "The effect of housing wealth on labor force participation: Evidence from China," Journal of Housing Economics, Elsevier, vol. 33(C), pages 59-69.
    4. Xiaolan Tan & Wentao Yu & Shiwei Wu, 2022. "The Impact of the Dynamics of Agglomeration Externalities on Air Pollution: Evidence from Urban Panel Data in China," Sustainability, MDPI, vol. 14(1), pages 1-22, January.
    5. Shuhong Peng, 2019. "Urban scale and wage premium: evidence from China," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 24(3), pages 468-480, July.
    6. Yankow, Jeffrey J., 2006. "Why do cities pay more? An empirical examination of some competing theories of the urban wage premium," Journal of Urban Economics, Elsevier, vol. 60(2), pages 139-161, September.
    7. Zhiqiang Liu, 2014. "Human capital externalities in cities: evidence from Chinese manufacturing firms," Journal of Economic Geography, Oxford University Press, vol. 14(3), pages 621-649.
    8. Wen, Mei, 2004. "Relocation and agglomeration of Chinese industry," Journal of Development Economics, Elsevier, vol. 73(1), pages 329-347, February.
    9. Li, Chao & Gibson, John, 2013. "Rising Regional Inequality in China: Fact or Artifact?," World Development, Elsevier, vol. 47(C), pages 16-29.
    10. Dinggen Zhou & Yanguang Liu & Xiaohang Ren & Cheng Yan & Yukun Shi, 2022. "Economic agglomeration and product quality upgrading: evidence from China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 20(4), pages 377-395, October.
    11. Fleischer, Belton M. & Yang, Dennis T., 2003. "Labor laws and regulations in China," China Economic Review, Elsevier, vol. 14(4), pages 426-433.
    12. repec:hal:spmain:info:hdl:2441/l4oaogsnr9rvqfme8pagm9sb6 is not listed on IDEAS
    13. Kristian Behrens & Dmitry Pokrovsky & Evgeny Zhelobodko, 2018. "Market size, occupational self†selection, sorting, and income inequality," Journal of Regional Science, Wiley Blackwell, vol. 58(1), pages 38-62, January.
    14. Samuel Adams & Edem Kwame Mensah Klobodu, 2019. "Urbanization, Economic Structure, Political Regime, and Income Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(3), pages 971-995, April.
    15. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    16. Yali Liu & Ming Lu & Kuanhu Xiang, 2018. "Balance through Agglomeration: A Race between Geography and Policy in China's Regional Development," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(6), pages 72-96, November.
    17. Song, Yang, 2014. "What should economists know about the current Chinese hukou system?," China Economic Review, Elsevier, vol. 29(C), pages 200-212.
    18. Junwei Shi & Hongyan Liu, 2022. "Wage increase and innovation in manufacturing industries: Evidence from China," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 27(1), pages 173-198, January.
    19. Pierre-Philippe Combes & Sylvie Démurger & Shi Li, 2015. "Migration Externalities in China," SciencePo Working papers Main halshs-01137798, HAL.
    20. Zhang, Jian & Jin, Songqing & Li, Tao & Wang, Haigang, 2021. "Gender discrimination in China: Experimental evidence from the job market for college graduates," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 819-835.
    21. Steckel, Richard H. & Moehling, Carolyn M., 2001. "Rising Inequality: Trends In The Distribution Of Wealth In Industrializing New England," The Journal of Economic History, Cambridge University Press, vol. 61(1), pages 160-183, March.
    22. Au, Chun-Chung & Henderson, J. Vernon, 2006. "How migration restrictions limit agglomeration and productivity in China," Journal of Development Economics, Elsevier, vol. 80(2), pages 350-388, August.
    23. Juan Yin & Zhong Yang & Jin Guo, 2022. "Externalities of Urban Agglomerations: An Empirical Study of the Chinese Case," Sustainability, MDPI, vol. 14(19), pages 1-19, September.
    24. Yantuan Yu & Yun Zhang & Xiao Miao, 2018. "Impacts of Dynamic Agglomeration Externalities on Eco-Efficiency: Empirical Evidence from China," IJERPH, MDPI, vol. 15(10), pages 1-27, October.
    25. Broadberry, Stephen & Ghosal, Sayantan & Proto, Eugenio, 2017. "Anonymity, efficiency wages and technological progress," Journal of Development Economics, Elsevier, vol. 127(C), pages 379-394.
    26. Anping Chen & Tianshi Dai & Mark D. Partridge, 2021. "Agglomeration and firm wage inequality: Evidence from China," Journal of Regional Science, Wiley Blackwell, vol. 61(2), pages 352-386, March.
    27. Meng, Xin & Zhang, Junsen, 2001. "The Two-Tier Labor Market in Urban China: Occupational Segregation and Wage Differentials between Urban Residents and Rural Migrants in Shanghai," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 485-504, September.
    28. Han, Jun & Liu, Runjuan & Zhang, Junsen, 2012. "Globalization and wage inequality: Evidence from urban China," Journal of International Economics, Elsevier, vol. 87(2), pages 288-297.
    29. Qiu, Leiju & Zhao, Daxuan, 2019. "Urban inclusiveness and income inequality in China," Regional Science and Urban Economics, Elsevier, vol. 74(C), pages 57-64.
    30. Wan, Guanghua & Wang, Chen, 2015. "Income Polarization in the People’s Republic of China: Trends and Changes," ADBI Working Papers 538, Asian Development Bank Institute.
    31. 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.
    32. Han, Jun & Li, Shi, 2017. "Internal migration and external benefit: The impact of labor migration on the wage structure in urban China," China Economic Review, Elsevier, vol. 46(C), pages 67-86.
    33. Xing, Chunbing & Zhang, Junfu, 2017. "The preference for larger cities in China: Evidence from rural-urban migrants," China Economic Review, Elsevier, vol. 43(C), pages 72-90.
    34. Qiyan Zeng & Xiaofu Chen, 2022. "Identification of urban-rural integration types in China – an unsupervised machine learning approach," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 15(2), pages 400-415, September.
    35. Philipp Ehrl & Leonardo Monasterio, 2021. "Spatial skill concentration agglomeration economies," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 140-161, January.
    36. Lee, Leng, 2012. "Decomposing wage differentials between migrant workers and urban workers in urban China's labor markets," China Economic Review, Elsevier, vol. 23(2), pages 461-470.
    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. Guangliang Yang & Lixing Li & Shihe Fu, 2020. "Do rural migrants benefit from labor market agglomeration economies? Evidence from Chinese cities," Growth and Change, Wiley Blackwell, vol. 51(3), pages 910-931, September.
    2. Liao, Yu & Zhang, Junfu, 2021. "Hukou status, housing tenure choice and wealth accumulation in urban China," China Economic Review, Elsevier, vol. 68(C).
    3. Iwasaki, Ichiro & Ma, Xinxin, 2020. "Gender wage gap in China: a large meta-analysis," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 54, pages 1-17.
    4. He, Xiaobo & Luo, Zijun, 2020. "Does Hukou pay? Evidence from nanny markets in urban China," China Economic Review, Elsevier, vol. 63(C).
    5. Iwasaki, Ichiro & Ma, Xinxin, 2020. "Gender Wage Gap in China: A Large Meta-Analysis," CEI Research Paper Series 2020-5, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    6. Messinis, George, 2013. "Returns to education and urban-migrant wage differentials in China: IV quantile treatment effects," China Economic Review, Elsevier, vol. 26(C), pages 39-55.
    7. Combes, Pierre-Philippe & Démurger, Sylvie & Li, Shi & Wang, Jianguo, 2020. "Unequal migration and urbanisation gains in China," Journal of Development Economics, Elsevier, vol. 142(C).
    8. Ahlfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2019. "The economic effects of density: A synthesis," Journal of Urban Economics, Elsevier, vol. 111(C), pages 93-107.
    9. Zhiling Wang & Lu Chen, 2019. "Destination choices of Chinese rural–urban migrant workers: Jobs, amenities, and local spillovers," Journal of Regional Science, Wiley Blackwell, vol. 59(3), pages 586-609, June.
    10. Qing Liu & Jian Wang, 2022. "Spatial agglomeration and firm productivity: Does trade status matter?," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(S2), pages 5-18, November.
    11. Ye, Longfeng & Robertson, Peter E., 2019. "Hitting the Great Wall: Structural change and China's growth slowdown," China Economic Review, Elsevier, vol. 56(C), pages 1-1.
    12. 岩﨑, 一郎 & Iwasaki, Ichiro & 馬, 欣欣 & Ma, Xin Xin, 2019. "現代中国における男女賃金格差: メタ分析による接近," Discussion Paper Series 689, Institute of Economic Research, Hitotsubashi University.
    13. Anping Chen & Tianshi Dai & Mark D. Partridge, 2021. "Agglomeration and firm wage inequality: Evidence from China," Journal of Regional Science, Wiley Blackwell, vol. 61(2), pages 352-386, March.
    14. He, Ming & Chen, Yang & van Marrewijk, Charles, 2017. "Urban Transformation and Technology Spillovers: Evidence from China's Electric Apparatus Sector," RIEI Working Papers 2017-01, Xi'an Jiaotong-Liverpool University, Research Institute for Economic Integration.
    15. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    16. Siddique Abu Bakkar, 2020. "Identity-based Earning Discrimination among Chinese People," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-42, January.
    17. Chen, Binkai & Liu, Dan & Lu, Ming, 2018. "City size, migration and urban inequality in China," China Economic Review, Elsevier, vol. 51(C), pages 42-58.
    18. Vahan Sargsyan, 2015. "Differential Treatment in the Chinese Labor Market. Is Hukou Type the Only Problem?," CERGE-EI Working Papers wp548, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    19. Xing, Chunbing & Zhang, Junfu, 2017. "The preference for larger cities in China: Evidence from rural-urban migrants," China Economic Review, Elsevier, vol. 43(C), pages 72-90.
    20. Yanjiao Song & Chuanyong Zhang, 2020. "City size and housing purchase intention: Evidence from rural–urban migrants in China," Urban Studies, Urban Studies Journal Limited, vol. 57(9), pages 1866-1886, July.

    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:gam:jsusta:v:15:y:2023:i:4:p:3490-:d:1068070. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.