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Migration externalities in Chinese cities

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  • Combes, Pierre-Philippe
  • Démurger, Sylvie
  • Li, Shi

Abstract

We analyse the impact of internal migration in China on natives׳ labour market outcomes. We find evidence of a large positive correlation of the city share of migrants with natives׳ wages. Using different sets of control variables and instruments suggests that the effect is causal. The large total migrant impact (+10% when one moves from the first to the third quartile of the migrant variable distribution) arises from gains due to complementarity with natives in the production function (+6.4%), and from gains due to agglomeration economies (+3.3%). Finally, we find some evidence of a stronger effect for skilled natives than for unskilled, as expected from theory. Overall, our findings support large nominal wage gains that can be expected from further migration and urbanisation in China.

Suggested Citation

  • Combes, Pierre-Philippe & Démurger, Sylvie & Li, Shi, 2015. "Migration externalities in Chinese cities," European Economic Review, Elsevier, vol. 76(C), pages 152-167.
  • Handle: RePEc:eee:eecrev:v:76:y:2015:i:c:p:152-167
    DOI: 10.1016/j.euroecorev.2015.02.004
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    2. Pierre-Philippe Combes & Sylvie Démurger & Shi Li, 2017. "Productivity Gains from Agglomeration and Migration in the People's Republic of China between 2002 and 2013," Asian Development Review, MIT Press, vol. 34(2), pages 184-200, September.
    3. 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.
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    5. Alessia Matano & Moisés Obaco & Vicente Royuela, 2018. "“What drives the spatial wage premium for formal and informal workers? The case of Ecuador”," IREA Working Papers 201813, University of Barcelona, Research Institute of Applied Economics, revised Jun 2018.
    6. Ting Wang & Areendam Chanda, 2016. "Manufacturing Growth and Local Multipliers in China," Departmental Working Papers 2016-02, Department of Economics, Louisiana State University.
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    9. Chen, Anping & Dai, Tianshi & Partridge, Mark, 2017. "Agglomeration and Firm Wage Inequality: Evidence from China," MPRA Paper 83516, University Library of Munich, Germany.
    10. Ricardo Hausmann & Juan Obach & Miguel Angel Santos, 2016. "Special Economic Zones in Panama: Technology Spillovers from a Labor Market Perspective," CID Working Papers 326, Center for International Development at Harvard University.
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    12. Stef Proost & Jacques-Francois Thisse, 2017. "What Can Be Learned from Spatial Economics?," HSE Working papers WP BRP 167/EC/2017, National Research University Higher School of Economics.
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    15. Hausmann, Ricardo & Obach, Juan & Santos, Miquel Angel, 2016. "Special Economic Zones in Panama: A Critical Assessment," Working Paper Series rwp16-044, Harvard University, John F. Kennedy School of Government.
    16. repec:gam:jsusta:v:8:y:2016:i:2:p:162:d:63642 is not listed on IDEAS
    17. Ming, Tingzhen & Wu, Yongjia & de_Richter, Renaud K. & Liu, Wei & Sherif, S.A., 2017. "Solar updraft power plant system: A brief review and a case study on a new system with radial partition walls in its collector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 472-487.
    18. Alessia Matano & Moisés Obaco & Vicente Royuela, 2018. "“What drives the spatial wage premium for formal and informal workers? The case of Ecuador”," AQR Working Papers 201806, University of Barcelona, Regional Quantitative Analysis Group, revised Jun 2018.
    19. Urban, Frauke & Geall, Sam & Wang, Yu, 2016. "Solar PV and solar water heaters in China: Different pathways to low carbon energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 531-542.

    More about this item

    Keywords

    Migration; Urban development; Agglomeration economies; Wage disparities; China;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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