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

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  1. 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 & Francis Journals, vol. 2(3), pages 185-205.
  2. Knight, J & Song, L & Huaibin, J, 1997. "Chinese Rural Migrants in Urban Enterprises : Three Perspectives," Economics Series Working Papers 99190, University of Oxford, Department of Economics.
  3. Sylvie Démurger & Marc Gurgand & Li Shi & Yu Ximing, 2008. "Migrants as second-class workers in urban China? A decomposition analysis," Working Papers 0808, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
  4. Xing, Chunbing, 2010. "Migration, Self-Selection, and Income Distributions: Evidence from Rural and Urban China," IZA Discussion Papers 4979, Institute for the Study of Labor (IZA).
  5. 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).
  6. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
  7. 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.
  8. Zhong Zhao, 2005. "Migration, Labor Market Flexibility, and Wage Determination in China: A Review," Labor and Demography 0507009, EconWPA.
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