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Relaxing Hukou: Increased labor mobility and China’s Economic Geography

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  • Bosker, Maarten
  • Brakman, Steven
  • Garretsen, Harry
  • Schramm, Marc

Abstract

China’s Hukou system poses severe restrictions on labor mobility. This paper assesses the consequences of relaxing these restrictions for China’s internal economic geography. We base our analysis on a new economic geography model. First, we obtain estimates of the important model parameters on the basis of information on 264 of China’s prefecture cities over the period 1999-2005. Second, and by using our estimation results as input, we simulate various long-run scenarios of China’s internal economic geography that differ in their degree of interregional labor mobility. We find that increased labor mobility will lead to more pronounced core-periphery outcomes. Interestingly, these agglomerations are not necessarily along the coastal regions. Given the increased importance of China’s internal market, firms agglomerate in the populous heartland of China. China’s internal demand will be the most important determinant of its future economic geography.

Suggested Citation

  • Bosker, Maarten & Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2010. "Relaxing Hukou: Increased labor mobility and China’s Economic Geography," CEPR Discussion Papers 8106, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8106
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    Cited by:

    1. Roberts,Mark, 2016. "Identifying the economic potential of Indian districts," Policy Research Working Paper Series 7623, The World Bank.
    2. World Bank, 2012. "In Search of Opportunities : How a More Mobile Workforce Can Propel Ukraine’s Prosperity (Vol. 1 of 2) : Summary Report," World Bank Other Operational Studies 12268, The World Bank.
    3. Yinhua Mai & Xiujian Peng & Peter Dixon & Maureen Rimmer, 2014. "The economic effects of facilitating the flow of rural workers to urban employment in China," Papers in Regional Science, Wiley Blackwell, vol. 93(3), pages 619-642, August.
    4. Qi, Di & Wu, Yichao, 2016. "The extent and risk factors of child poverty in urban China — What can be done for realising the Chinese government goal of eradicating poverty before 2020," Children and Youth Services Review, Elsevier, vol. 63(C), pages 74-82.
    5. Huasheng Song & Min Zhang & Ruqu Wang, 2016. "Amenities and spatial talent distribution: evidence from the Chinese IT industry," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 9(3), pages 517-533.
    6. repec:eee:ecosys:v:41:y:2017:i:2:p:165-178 is not listed on IDEAS
    7. Pi, Jiancai & Zhang, Pengqing, 2016. "Hukou system reforms and skilled-unskilled wage inequality in China," China Economic Review, Elsevier, vol. 41(C), pages 90-103.
    8. Steven Brakman & Harry Garretsen & Zhao Zhao, 2017. "Spatial concentration of manufacturing firms in China," Papers in Regional Science, Wiley Blackwell, vol. 96, pages 179-205, March.
    9. Bosker,Maarten & Deichmann,Uwe & Roberts,Mark, 2015. "Hukou and highways : the impact of China?s spatial development policies on urbanization and regional inequality," Policy Research Working Paper Series 7350, The World Bank.
    10. Gilles Duranton, 2015. "Growing through Cities in Developing Countries," World Bank Research Observer, World Bank Group, vol. 30(1), pages 39-73.
    11. Shiwei Hu & Steven Brakman & Charles van Marrewijk, 2014. "Smart Cities are Big Cities - Comparative Advantage in Chinese Cities," CESifo Working Paper Series 5028, CESifo Group Munich.
    12. Christensen, Peter & McCord, Gordon C., 2016. "Geographic determinants of China's urbanization," Regional Science and Urban Economics, Elsevier, vol. 59(C), pages 90-102.
    13. Flückiger, Matthias & Ludwig, Markus, 2017. "Malaria suitability, urbanization and persistence: Evidence from China over more than 2000 years," European Economic Review, Elsevier, vol. 92(C), pages 146-160.
    14. Ana I. Moreno-Monroy & Shu Yu & Victoria Euse, 2016. "Urban Employment in Small Businesses and the Level of Economic Development: Evidence from Chinese Cities," Growth and Change, Wiley Blackwell, vol. 47(1), pages 53-71, March.
    15. Ting Wang & Areendam Chanda, 2016. "Manufacturing Growth and Local Multipliers in China," Departmental Working Papers 2016-02, Department of Economics, Louisiana State University.
    16. Iris Claus & Les Oxley & Ming Lu & Guanghua Wan, 2014. "Urbanization And Urban Systems In The People'S Republic Of China: Research Findings And Policy Recommendations," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 671-685, September.
    17. repec:spr:jknowl:v:8:y:2017:i:2:d:10.1007_s13132-016-0434-0 is not listed on IDEAS
    18. Fabien Candau & Elisa Dienesch, 2015. "Spatial distribution of skills and regional trade integration," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(2), pages 451-488, March.
    19. Li, Xibao, 2015. "Specialization, institutions and innovation within China's regional innovation systems," Technological Forecasting and Social Change, Elsevier, vol. 100(C), pages 130-139.
    20. repec:eee:jcecon:v:46:y:2018:i:2:p:515-543 is not listed on IDEAS
    21. Boffy-Ramirez, Ernest & Moon, Soojae, 2017. "The Role of China's Household Registration System in the Urban-Rural Income Differential," IZA Discussion Papers 11022, Institute for the Study of Labor (IZA).
    22. repec:spr:anresc:v:59:y:2017:i:2:d:10.1007_s00168-017-0838-1 is not listed on IDEAS
    23. repec:spr:chinre:v:9:y:2016:i:4:d:10.1007_s12187-015-9351-1 is not listed on IDEAS

    More about this item

    Keywords

    China; economic geography; labor mobility;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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