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The labor market outcomes of jurisdictional consolidation: Evidence from city–county mergers in China

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  • Bo, Shiyu
  • Wang, Yi

Abstract

In this paper, we examine the labor market outcomes of jurisdictional consolidation, focusing on the effect of city–county mergers in China between 2011 and 2018 on the wages of migrant workers and local residents. Under the merger reform, city districts were consolidated with nearby counties, expanding the jurisdiction under the centralized control of the prefecture government. Using a staggered difference-in-differences approach, we find that wages increased by 3.1% for migrant workers and 10.4% for local residents in consolidated jurisdictions. We attribute these effects to local economic growth and the resulting differentiated labor demand for migrant and local workers.

Suggested Citation

  • Bo, Shiyu & Wang, Yi, 2025. "The labor market outcomes of jurisdictional consolidation: Evidence from city–county mergers in China," Journal of Urban Economics, Elsevier, vol. 149(C).
    • Handle: RePEc:eee:juecon:v:149:y:2025:i:c:s0094119025000531
    DOI: 10.1016/j.jue.2025.103788
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    Keywords

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    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • 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

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