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Does Internal Immigration Always Lead to Urban Unemployment in Emerging Economies? : A Structural Approach Based on Data from China

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  • LIU, YANG

Abstract

Immigration restrictions usually arise from the idea that immigrants compete with original residents for jobs. Their effects on urban job creation are often ignored. In this study, we develop an inner-city dual labor market model that incorporates both of those effects, and apply it to empirical studies on China. We find that rural-urban immigration does not contribute to urban unemployment in China. Migrants take away some jobs from residents, but at the same time, they lower equilibrium wages and increase output, which expand the demand for resident workers. This latter positive impact is larger than the former substitution effect in China.

Suggested Citation

  • Liu, Yang, 2012. "Does Internal Immigration Always Lead to Urban Unemployment in Emerging Economies? : A Structural Approach Based on Data from China," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 53(1), pages 85-105, June.
    • Handle: RePEc:hit:hitjec:v:53:y:2012:i:1:p:85-105
    DOI: 10.15057/23146
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    References listed on IDEAS

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    Cited by:

    1. Liu, Yang, 2013. "Labor market matching and unemployment in urban China," China Economic Review, Elsevier, vol. 24(C), pages 108-128.

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    More about this item

    Keywords

    dual labor market; wages; labor demand and supply; substitution effect; scale effect;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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