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Migration Externalities in Chinese Cities

Author

Listed:
  • Pierre-Philippe Combes

    (Département d'économie)

  • Sylvie Démurger

    (CNRS)

  • Shi Li

    (Beijing Normal University)

Abstract

We analyse the impact of internal migration in China on natives’ labour market outcomes. We find evidence of a large positive correlation of the city share of migrants with natives’ wages. Using different sets of control variables and instruments suggests that the effect is causal. The large total migrant impact (+10% when one moves from the first to the third quartile of the migrant variable distribution) arises from gains due to complementarity with natives in the production function (+6.4%), and from gains due to agglomeration economies (+3.3%). Finally, we find some evidence of a stronger effect for skilled natives than for unskilled, as expected from theory. Overall, our findings support large nominal wage gains that can be expected from further migration and urbanisation in China.

Suggested Citation

  • Pierre-Philippe Combes & Sylvie Démurger & Shi Li, 2015. "Migration Externalities in Chinese Cities," Sciences Po Economics Discussion Papers 2015-05, Sciences Po Departement of Economics.
  • Handle: RePEc:spo:wpecon:info:hdl:2441/6n1ke9ea1o83aqc0oducs7vd1q
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    More about this item

    Keywords

    migration; urban development; agglomeration economies; wage disparities; China.;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • 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
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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