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The Local Labor Market Effect of Relaxing Internal Migration Restrictions: Evidence from China

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  • Lei An
  • Yu Qin
  • Jing Wu
  • Wei You

Abstract

We study how a significant relaxation of internal migration restrictions affects labor market outcomes of incumbent migrants and natives, exploiting the 2014 hukou reform in China, which substantially removed the migration barriers of cities with an urban population below 5 million (nonmegacities). Using a difference-in-differences method, we find that migrants’ wages in nonmegacities experienced approximately a 2.6%–7.9% decline relative to that in megacities after the policy. The policy had nonnegative impacts on the wages of natives in nonmegacities. These results suggest that the downward wage pressure imposed by new migrants falls primarily on incumbent migrants rather than on natives.

Suggested Citation

  • Lei An & Yu Qin & Jing Wu & Wei You, 2024. "The Local Labor Market Effect of Relaxing Internal Migration Restrictions: Evidence from China," Journal of Labor Economics, University of Chicago Press, vol. 42(1), pages 161-200.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/722620
    DOI: 10.1086/722620
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