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Does Internal Immigration Always Lead to Urban Unemployment in Emerging Economies? : A Structural Approach Based on Data from China

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  • LIU, YANG
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    Abstract

    Immigration restrictions usually arise from the idea that immigrants compete with original residents for jobs. Their effects on urban job creation are often ignored. In this study, we develop an inner-city dual labor market model that incorporates both of those effects, and apply it to empirical studies on China. We find that rural-urban immigration does not contribute to urban unemployment in China. Migrants take away some jobs from residents, but at the same time, they lower equilibrium wages and increase output, which expand the demand for resident workers. This latter positive impact is larger than the former substitution effect in China.

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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/23146/1/HJeco0530100850.pdf
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    Bibliographic Info

    Article provided by Hitotsubashi University in its journal Hitotsubashi Journal of Economics.

    Volume (Year): 53 (2012)
    Issue (Month): 1 (June)
    Pages: 85-105

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    Handle: RePEc:hit:hitjec:v:53:y:2012:i:1:p:85-105

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    Related research

    Keywords: dual labor market; wages; labor demand and supply; substitution effect; scale effect;

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    1. Phan, Diep & Coxhead, Ian, 2010. "Inter-provincial migration and inequality during Vietnam's transition," Journal of Development Economics, Elsevier, vol. 91(1), pages 100-112, January.
    2. Sylvie Démurger & Marc Gurgand & Shi Li & Yue Ximing, 2008. "Migrants as second-class workers in urban China? A decomposition analysis," Post-Print halshs-00269119, HAL.
    3. John Knight & Lina Song & Jia Huaibin, 1999. "Chinese rural migrants in urban enterprises: Three perspectives," The Journal of Development Studies, Taylor and Francis Journals, vol. 35(3), pages 73-104.
    4. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680, February.
    5. Xing, Chunbing, 2009. "Migration, Self-selection, and Income Distributions: Evidence from Rural and Urban China," MPRA Paper 17036, University Library of Munich, Germany.
    6. Meng, Xin & Zhang, Dandan, 2010. "Labour Market Impact of Large Scale Internal Migration on Chinese Urban 'Native' Workers," IZA Discussion Papers 5288, Institute for the Study of Labor (IZA).
    7. Zhong Zhao, 2005. "Migration, Labor Market Flexibility, and Wage Determination in China: A Review," Labor and Demography 0507009, EconWPA.
    8. Simon Appleton & John Knight & Lina Song & Qingjie Xia, 2004. "Contrasting paradigms: segmentation and competitiveness in the formation of the chinese labour market," Journal of Chinese Economic and Business Studies, Taylor and Francis Journals, vol. 2(3), pages 185-205.
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