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

Yang, Guangliang and Li, Lixing and Fu, Shihe (2017): Do Rural Migrants Benefit from Labor Market Agglomeration Economies? Evidence from Chinese Cities.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Rural migrants; labor market agglomeration economies; Marshallian externalities; labor market pooling; human capital externalities
• Subjects: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J61 - Geographic Labor Mobility ; Immigrant Workers; J - Labor and Demographic Economics > J7 - Labor Discrimination > J71 - Discrimination; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O18 - Urban, Rural, Regional, and Transportation Analysis ; Housing ; Infrastructure; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R23 - Regional Migration ; Regional Labor Markets ; Population ; Neighborhood Characteristics

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