Publication Type

Journal Article

Version

submittedVersion

Publication Date

1-2020

Abstract

This paper quantitatively studies the local welfare impacts of inter-city migration in China. We structurally estimate a trade model with endogenous migration decisions using data from 279 prefecture-level cities. The results suggest that inflows of migrant workers increase welfare in the destination cities between 2000 and 2005 despite their negative impacts on congestion and nominal wage. The positive local impacts of migration depend crucially on the endogenous firm entry. The positive impacts in the destination cities also spill over to the neighboring cities through inter-city trade, often leading to higher welfare gains in the nearby cities than the destination cities themselves. We also show that further relaxing the Hukou restrictions in the largest Chinese cities is welfare-improving to the local residents.

Keywords

Regional trade, Migration, Welfare, Economic geography

Discipline

Asian Studies | Behavioral Economics | Human Geography | Regional Economics

Research Areas

Applied Microeconomics

Publication

Journal of Urban Economics

Volume

115

First Page

1

Last Page

24

ISSN

0094-1190

Identifier

10.1016/j.jue.2019.06.004

Publisher

Elsevier: 24 months

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1016/j.jue.2019.06.004

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