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Hukou reform and labor market outcomes of urban natives in China

Author

Listed:
  • Wenjie Zhang

    (Renmin University of China)

  • Xianqiang Zou

    (Renmin University of China)

  • Chuliang Luo

    (Renmin University of China)

  • Lulu Yuan

    (Zhongnan University of Economics and Law)

Abstract

This paper investigates the causal effects of the relaxation of internal migration restrictions on labor market outcomes of urban natives in China, exploiting an “entry barrier” hukou reform. The prevalent view of China’s hukou reform emphasizes its attraction for low-skilled workers, neglecting its considerable impact on high-skilled individuals. We find that the hukou reform cities attracted more high-skilled migrants. The greater availability of high-skilled migrants due to the hukou reform did not significantly affect the overall employment and income of urban natives. However, the reform did lead to employment shifts among urban natives, and these effects were most pronounced among high-skilled and medium-skilled urban natives. In addition, we find evidence that the reform attracted more self-employed individuals and private-owned enterprises (POEs), which stimulated local labor demand, especially for high-skilled workers.

Suggested Citation

  • Wenjie Zhang & Xianqiang Zou & Chuliang Luo & Lulu Yuan, 2024. "Hukou reform and labor market outcomes of urban natives in China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(2), pages 1-41, June.
    • Handle: RePEc:spr:jopoec:v:37:y:2024:i:2:d:10.1007_s00148-024-01027-6
    DOI: 10.1007/s00148-024-01027-6
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    More about this item

    Keywords

    Hukou reform; Labor market outcomes; Skill-biased effect; Employment shifts; Labor demand;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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