This paper estimates the causal effect of rural-urban migration on urban production in China. We use longitudinal data on manufacturing firms between 2001 and 2006 and exploit exogenous variation in rural-urban migration due to agricultural price shocks. Following a migrant inflow, labor costs decline and employment expands. Labor productivity decreases sharply and remains low in the medium run. A quantitative framework suggests that destinations become too labor-abundant and migration mostly benefits low-productivity firms within locations. As migrants select into high-productivity destinations, migration however strongly contributes to the equalization of factor productivity across locations.
|Publication status||Published - 2018|
|Name||CESifo Working Paper|
- rural-urban migration
- structural transformation
- urban production
Imbert, C., Seror, M., Zhang, Y., & Zylberberg, Y. (2018). Migrants and Firms: Evidence from China (R&R, American Economic Review). (7440 ed.) (CESifo Working Paper). CESifo. https://ssrn.com/abstract=3338794