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The impact of China's 2014 Hukou reform on economic growth

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  • Guo, Xing
  • Xu, Jiajun

Abstract

The 2014 Hukou reform is a crucial initiative in advancing China's urbanization. While previous studies have extensively explored its impact on the labor market, its effect on economic growth remains unclear. Utilizing nighttime light data, this paper employs the difference-in-differences (DID) method to examine the reform's impact on economic growth. The study finds that the 2014 Hukou reform significantly promoted economic growth, particularly in cities with populations between one and five million and in the eastern regions. Mechanism analysis reveals that the labor pooling effect, the local market effect, and the knowledge spillover effect positively contributed to economic growth, while the air pollution effect had a negative impact. Overall, this study provides empirical evidence on the economic impact of the 2014 Hukou reform and offers recommendations for future Hukou reforms.

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  • Guo, Xing & Xu, Jiajun, 2025. "The impact of China's 2014 Hukou reform on economic growth," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 641-655.
    • Handle: RePEc:eee:ecanpo:v:85:y:2025:i:c:p:641-655
    DOI: 10.1016/j.eap.2024.12.031
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