How does rural-urban migration shape urban production in developing countries? We use longitudinal data on Chinese manufacturing firms between 2000 and 2006, and exploit exogenous variation in rural-urban migration induced by agricultural income shocks for identification. We find that, when immigration increases, manufacturing production becomes more labor-intensive and productivity declines. We investigate the reorganization of production using patent applications and product information. We show that rural-urban migration induces both labor-oriented technological change and the adoption of labor intensive product varieties.
|Journal||American Economic Review|
|Publication status||Accepted/In press - 2021|