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Labour Market Impact of Large Scale Internal Migration on Chinese Urban 'Native' Workers

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  • Meng, Xin

    ()
    (Australian National University)

  • Zhang, Dandan

    ()
    (Peking University)

Abstract

Hundreds of millions of rural migrants have moved into Chinese cities since the early 1990s contributing greatly to economic growth, yet, they are often blamed for reducing urban 'native' workers’ employment opportunities, suppressing their wages and increasing pressure on infrastructure and other public facilities. This paper examines the causal relationship between rural-urban migration and urban native workers' labour market outcomes in Chinese cities. After controlling for the endogeneity problem our results show that rural migrants in urban China have modest positive or zero effects on the average employment and insignificant impact on earnings of urban workers. When examine the impact on unskilled labours we once again find it to be positive and insignificant. We conjecture that the reason for the lack of adverse effects is due partially to the labour market segregation between the migrants and urban natives, and partially due to the complementarities between the two groups of workers. Further investigation reveals that the increase in migrant inflow is related to the demand expansion and that if the economic growth continues, elimination of labour market segregation may not necessarily lead to an adverse impact of migration on urban native labour market outcomes.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5288.

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Length: 46 pages
Date of creation: Oct 2010
Date of revision:
Handle: RePEc:iza:izadps:dp5288

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Keywords: migration; native labour market outcomes; China;

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References

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  1. Giovanni Peri & Gianmarco I.P. Ottaviano, 2006. "Rethinking the Effects of Immigration on Wages," Working Papers 634, University of California, Davis, Department of Economics.
  2. Meng,Xin, 2000. "Labour Market Reform in China," Cambridge Books, Cambridge University Press, number 9780521771269.
  3. Wing Thye Woo & Michael Magill & Julian R. Betts, 2003. "Chinese Economic Growth: Sources and Prospects," Working Papers 968, University of California, Davis, Department of Economics.
  4. Christian Dustmann & Francesca Fabbri, 2003. "Language proficiency and labour market performance of immigrants in the UK," Economic Journal, Royal Economic Society, vol. 113(489), pages 695-717, 07.
  5. Manacorda, Marco & Manning, Alan & Wadsworth, Jonathan, 2006. "The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain," IZA Discussion Papers 2352, Institute for the Study of Labor (IZA).
  6. Christian Dustmann & Francesca Fabbri & Ian Preston, 2005. "The Impact of Immigration on the UK Labour Market," CReAM Discussion Paper Series 0501, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  7. de Brauw, Alan & Giles, John, 2008. "Migrant labor markets and the welfare of rural households in the developing world : evidence from China," Policy Research Working Paper Series 4585, The World Bank.
  8. David Card & Ethan G. Lewis, 2007. "The Diffusion of Mexican Immigrants During the 1990s: Explanations and Impacts," NBER Chapters, in: Mexican Immigration to the United States, pages 193-228 National Bureau of Economic Research, Inc.
  9. Bao, Shuming & Bodvarsson, Örn B. & Hou, Jack W. & Zhao, Yaohui, 2007. "Interprovincial Migration in China: The Effects of Investment and Migrant Networks," IZA Discussion Papers 2924, Institute for the Study of Labor (IZA).
  10. J. Edward Taylor & Scott Rozelle & Alan deBrauw, 1999. "Migration, Remittances, and Agricultural Productivity in China," American Economic Review, American Economic Association, vol. 89(2), pages 287-291, May.
  11. Rachel M. Friedberg & Jennifer Hunt, 1995. "The Impact of Immigrants on Host Country Wages, Employment and Growth," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 23-44, Spring.
  12. Ethan Lewis, 2003. "Local, open economies within the U.S.: how do industries respond to immigration?," Working Papers 04-1, Federal Reserve Bank of Philadelphia.
  13. Leah Platt Boustan & Price V. Fishback & Shawn E. Kantor, 2007. "The Effect of Internal Migration on Local Labor Markets: American Cities During the Great Depression," NBER Working Papers 13276, National Bureau of Economic Research, Inc.
  14. 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.
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Cited by:
  1. Combes, Pierre-Philippe & Démurger, Sylvie & Li, Shi, 2013. "Urbanisation and Migration Externalities in China," CEPR Discussion Papers 9352, C.E.P.R. Discussion Papers.
  2. AKAY Alpaslan & BARGAIN Olivier & ZIMMERMANN Klaus F., 2011. "Relative Concerns of Rural-to-Urban Migrants in China," CEPS/INSTEAD Working Paper Series 2011-12, CEPS/INSTEAD.
  3. Liu, Yang, 2012. "Does Internal Immigration Always Lead to Urban Unemployment in Emerging Economies? : A Structural Approach Based on Data from China," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 53(1), pages 85-105, June.
  4. Xing, Chunbing & Zhang, Junfu, 2013. "The Preference for Larger Cities in China: Evidence from Rural-Urban Migrants," IZA Discussion Papers 7562, Institute for the Study of Labor (IZA).

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