Unequal Migration and Urbanisation Gains in China

GATE WP 1903 – January 2019

65 Pages Posted: 4 Feb 2019

See all articles by Pierre-Philippe Combes

Pierre-Philippe Combes

Université de Lyon; Sciences Po - Department of Economics; Centre for Economic Policy Research (CEPR)

Sylvie Démurger

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Shi Li

Beijing Normal University (BNU) - School of Economics and Business Administration

Jianguo Wang

Beijing Information Science and Technology University

Multiple version iconThere are 2 versions of this paper

Date Written: January 22, 2019

Abstract

We assess the role of internal migration and urbanisation in China on the nominal earnings of three groups of workers (rural migrants, low-skilled natives, and high-skilled natives). We estimate the impact of many city and city-industry characteristics that shape agglomeration economies, as well as migrant and human capital externalities and substitution effects. We also account for spatial sorting and reverse causality. Location matters for individual earnings, but urban gains are unequally distributed. High-skilled natives enjoy large gains from agglomeration and migrants at the city level. Both conclusions also hold, to a lesser extent, for low-skilled natives, who are only marginally negatively affected by migrants within their industry. By contrast, rural migrants slightly lose from migrants within their industry while otherwise gaining from migration and agglomeration, although less than natives. The different returns from migration and urbanisation are responsible for a large share of wage disparities in China.

Keywords: Urban Development, Agglomeration Economies, Wage Disparities, Migrants, Human Capital Externalities, China

JEL Classification: O18, R12, R23, J31, O53

Suggested Citation

Combes, Pierre-Philippe and Démurger, Sylvie and Li, Shi and Wang, Jianguo, Unequal Migration and Urbanisation Gains in China (January 22, 2019). GATE WP 1903 – January 2019, Available at SSRN: https://ssrn.com/abstract=3320497 or http://dx.doi.org/10.2139/ssrn.3320497

Pierre-Philippe Combes (Contact Author)

Université de Lyon ( email )

92 Rue Pasteur
Lyon, 69007
France

Sciences Po - Department of Economics ( email )

28, rue des Saints peres
Paris, 75007
France

HOME PAGE: http://https://www.gate.cnrs.fr/ppcombes

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Sylvie Démurger

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France
(33 4) 72 86 61 05 (Phone)
(33 4) 72 86 60 90 (Fax)

HOME PAGE: http://www.gate.cnrs.fr/spip.php?article22

Shi Li

Beijing Normal University (BNU) - School of Economics and Business Administration ( email )

No.19 Xinwai Str
Haidian District
Beijing, 100875
China

Jianguo Wang

Beijing Information Science and Technology University ( email )

Beijing
China

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