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Skill-biased imports, skill acquisition, and migration

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  • Fan, Jingting
  • Li, Lei

Abstract

Imported capital goods, which embody skill-complementary technologies, can increase the supply of skills in developing countries. Focusing on China and using a shift-share design, we show that city-level capital goods import growth increases the local skill share and that both skill acquisition and migration play a role. We develop and quantify a spatial equilibrium model with these two mechanisms to examine the aggregate effects of capital goods imports, accounting for trade and migration linkages between cities. Counterfactual experiments suggest that the growth in capital goods imports in China between 2000 and 2010 led to a 3.1–7.3 million increase in the stock of college graduates, representing 4.4–10.4% of the total increase over this period, with the increase disproportionately occurring in coastal regions. These endogenous skill supply responses reduce by half the increase in the aggregate skill premium due to capital goods imports.

Suggested Citation

  • Fan, Jingting & Li, Lei, 2025. "Skill-biased imports, skill acquisition, and migration," Journal of International Economics, Elsevier, vol. 157(C).
    • Handle: RePEc:eee:inecon:v:157:y:2025:i:c:s0022199625000844
    DOI: 10.1016/j.jinteco.2025.104128
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    Keywords

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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