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Rural–Urban Migration, Substitutability of Human Capital and City Productivity: Evidence from China

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  • Jixiang Yu
  • Kunrong Shen
  • Desu Liu

Abstract

Among the studies on the productivity effect of migration, the role of the substitutability of human capital between migrant workers and local workers has not received much attention. The elasticity of substitution is important for rural–urban migration in China, because there is a substantial difference in schooling quality between rural and urban regions and because there is imperfect competition in city labor markets. Using aggregate city-level data from the 2010 China Population Census, we find that the positive effect of human capital on city productivity improves as the substitutability increases. Moreover, a grid-search shows that the “best” estimate of the substitutability in China is between 2.1 and 2.5, far from being complete.

Suggested Citation

  • Jixiang Yu & Kunrong Shen & Desu Liu, 2015. "Rural–Urban Migration, Substitutability of Human Capital and City Productivity: Evidence from China," Review of Development Economics, Wiley Blackwell, vol. 19(4), pages 877-891, November.
    • Handle: RePEc:bla:rdevec:v:19:y:2015:i:4:p:877-891
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    2. Marco Baudino, 2021. "Rural-to-urban migration in developing economies: characterizing the role of the rural labor supply in the process of urban agglomeration and city growth," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(3), pages 533-556, June.
    3. Gustavo de Souza, 2022. "The Labor Market Consequences of Appropriate Technology," Working Paper Series WP 2022-53, Federal Reserve Bank of Chicago.
    4. Yang, Yang & Mukhopadhaya, Pundarik & Yu, Zhuangxiong, 2020. "Relationship between city size and firm productivity – A new interpretation using the Chinese experience," Economic Modelling, Elsevier, vol. 93(C), pages 546-558.
    5. Chen, Jie & Zhou, Qian, 2017. "City size and urban labor productivity in China: New evidence from spatial city-level panel data analysis," Economic Systems, Elsevier, vol. 41(2), pages 165-178.
    6. de Souza, Gustavo, 2022. "The Labor Market Consequences of Appropriate Technology," CEPREMAP Working Papers (Docweb) 2208, CEPREMAP.

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