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China's "Great Migration": The Impact of the Reduction in Trade Policy Uncertainty

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  • Facchini, Giovanni

    () (University of Nottingham)

  • Liu, Maggie Y.

    () (Smith College)

  • Mayda, Anna Maria

    () (Georgetown University)

  • Zhou, Minghai

    () (University of Nottingham)

Abstract

We analyze the effect of China's integration into the world economy on workers in the country and show that one important channel of impact has been internal migration. Specifically, we study the changes in internal migration rates triggered by the reduction in trade policy uncertainty faced by Chinese exporters in the U.S. This reduction is characterized by plausibly exogenous variation across sectors, which we use to construct a local measure of treatment, at the level of a Chinese prefecture, following Bartik (1991). This allows us to estimate a difference-in-difference empirical specification based on variation across Chinese prefectures before and after 2001. We find that prefectures facing the average decline in trade policy uncertainty experience an 18 percent increase in their internal in-migration rate – this result is driven by migrants who are "non-hukou", skilled, and in their prime working age. Finally, in those prefectures, working hours of "native" unskilled workers significantly increase – while the employment rates of neither native workers nor internal migrants change.

Suggested Citation

  • Facchini, Giovanni & Liu, Maggie Y. & Mayda, Anna Maria & Zhou, Minghai, 2018. "China's "Great Migration": The Impact of the Reduction in Trade Policy Uncertainty," IZA Discussion Papers 11279, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11279
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    More about this item

    Keywords

    hukou; immigration; internal migration; trade policy uncertainty;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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