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China's "Great Migration": The Impact of the Reduction in Trade Policy Uncertainty

Author

Listed:
  • Facchini, Giovanni

    (University of Nottingham)

  • Liu, Maggie Y.

    (Smith College)

  • Mayda, Anna Maria

    (Georgetown University)

  • Zhou, Minghai

    (University of Nottingham)

Abstract
We analyze the effect of China's integration into the world economy on workers in the country and show that one important channel of impact has been internal migration. Specifically, we study the changes in internal migration rates triggered by the reduction in trade policy uncertainty faced by Chinese exporters in the U.S. This reduction is characterized by plausibly exogenous variation across sectors, which we use to construct a local measure of treatment, at the level of a Chinese prefecture, following Bartik (1991). This allows us to estimate a difference-in-difference empirical specification based on variation across Chinese prefectures before and after 2001. We find that prefectures facing the average decline in trade policy uncertainty experience an 18 percent increase in their internal in-migration rate – this result is driven by migrants who are "non-hukou", skilled, and in their prime working age. Finally, in those prefectures, working hours of "native" unskilled workers significantly increase – while the employment rates of neither native workers nor internal migrants change.

Suggested Citation

  • Facchini, Giovanni & Liu, Maggie Y. & Mayda, Anna Maria & Zhou, Minghai, 2018. "China's "Great Migration": The Impact of the Reduction in Trade Policy Uncertainty," IZA Discussion Papers 11279, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11279
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    References listed on IDEAS

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    Cited by:

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    2. Wang, Feicheng & Liang, Zhe & Lehmann, Hartmut, 2021. "Import competition and informal employment: Empirical evidence from China," University of Göttingen Working Papers in Economics 426, University of Goettingen, Department of Economics.
    3. Yu, Chan, 2023. "The role of immigrants in the United States labor market and Chinese import competition," Journal of International Economics, Elsevier, vol. 144(C).
    4. Wang, Shubin & Zhao, Erlong & Razzaq, Hafiz Kashif, 2022. "Dynamic role of renewable energy efficiency, natural resources, and climate technologies in realizing environmental sustainability: Implications for China," Renewable Energy, Elsevier, vol. 198(C), pages 1095-1104.
    5. Nikolaos A. Kyriazis, 2021. "Trade Policy Uncertainty Effects on Macro Economy and Financial Markets: An Integrated Survey and Empirical Investigation," JRFM, MDPI, vol. 14(1), pages 1-20, January.
    6. Bombardini, Matilde & Li, Bingjing, 2020. "Trade, pollution and mortality in China," Journal of International Economics, Elsevier, vol. 125(C).
    7. Dai, Mi & Huang, Wei & Zhang, Yifan, 2021. "How do households adjust to tariff liberalization? Evidence from China's WTO accession," Journal of Development Economics, Elsevier, vol. 150(C).
    8. Edoardo Cefala & Giovanni Facchini & Corrado Giulietti & Jackie Wahba & Chuhong Wang, 2019. "The survey on migration and the reshaping of consumption patterns (MARCO_P)," Discussion Papers 2019-05, University of Nottingham, GEP.
    9. Zhou, Kang & Zhang, Junsen, 2021. "Trade normalization, export quality, and in-migration of skilled workers: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 375-387.
    10. Guo, Rufei & Zhang, Junsen & Zhou, Minghai, 2024. "The demography of the great migration in China," Journal of Development Economics, Elsevier, vol. 167(C).
    11. Jin, Zhangfeng, 2020. "Welfare Magnets and Internal Migration in China," GLO Discussion Paper Series 498, Global Labor Organization (GLO).
    12. Yuan Zhou & Yao Ji, 2021. "Trade Policy Uncertainty, Innovation and Total Factor Productivity," Sustainability, MDPI, vol. 14(1), pages 1-13, December.
    13. Dai, Mi & Huang, Wei & Zhang, Yifan, 2020. "Persistent effects of initial labor market conditions: The case of China's tariff liberalization after WTO accession," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 566-581.

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    More about this item

    Keywords

    internal migration; immigration; hukou; trade policy uncertainty;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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