Do Rural Migrants Benefit from Labor Market Agglomeration Economies? Evidence from Chinese Cities

30 Pages Posted: 9 Aug 2017

See all articles by Guangliang Yang

Guangliang Yang

Huaqiao University - Institute for Quantitative Economics

Lixing Li

Peking University

Shihe Fu

Xiamen University - The Wang Yanan Institute for Studies in Economics (WISE)

Date Written: August 9, 2017

Abstract

We combine the 2005 China Inter-Census Population Survey data and the 2004 China Manufacturing Census to test whether workers, particularly rural migrants, benefit from labor market Marshallian externalities. We find that workers in general, and rural migrants in particular, benefit from labor market pooling effect (measured by total employment in a city-industry cell) and human capital externalities (measured by share of workers with a college degree or above in a city-industry cell). These findings are robust to various sorting bias tests. However, rural migrants benefit much less than do local or urban workers, possibly because rural migrants lack social networks and are discriminated doubly in terms of being both “rural” and “migrants.” Our findings have policy implications on how Chinese cities can become skilled during the rapid urbanization process coupled with global competition.

Keywords: Rural migrants; labor market agglomeration economies, Marshallian externalities, labor market pooling, human capital externalities

JEL Classification: J30; J61; J71; O15; O18; R23

Suggested Citation

Yang, Guangliang and Li, Lixing and Fu, Shihe, Do Rural Migrants Benefit from Labor Market Agglomeration Economies? Evidence from Chinese Cities (August 9, 2017). Available at SSRN: https://ssrn.com/abstract=3015454 or http://dx.doi.org/10.2139/ssrn.3015454

Guangliang Yang

Huaqiao University - Institute for Quantitative Economics ( email )

Xiamen Campus: No.668 Jimei Avenue
Xiamen, Fujian 361021
China

Lixing Li

Peking University ( email )

National School of Development
Peking University
Beijing, Beijing 100871
China

Shihe Fu (Contact Author)

Xiamen University - The Wang Yanan Institute for Studies in Economics (WISE) ( email )

A 307, Economics Building
Xiamen, Fujian 361005
China

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