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The Local Labor Market Effect of Relaxing Internal Migration Restrictions: Evidence from China

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  • Lei An
  • Yu Qin
  • Jing Wu
  • Wei You

Abstract

We study how a significant relaxation of internal migration restrictions affects labor market outcomes of incumbent migrants and natives, exploiting the 2014 hukou reform in China, which substantially removed the migration barriers of cities with an urban population below 5 million (nonmegacities). Using a difference-in-differences method, we find that migrants’ wages in nonmegacities experienced approximately a 2.6%–7.9% decline relative to that in megacities after the policy. The policy had nonnegative impacts on the wages of natives in nonmegacities. These results suggest that the downward wage pressure imposed by new migrants falls primarily on incumbent migrants rather than on natives.

Suggested Citation

  • Lei An & Yu Qin & Jing Wu & Wei You, 2024. "The Local Labor Market Effect of Relaxing Internal Migration Restrictions: Evidence from China," Journal of Labor Economics, University of Chicago Press, vol. 42(1), pages 161-200.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/722620
    DOI: 10.1086/722620
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    Cited by:

    1. 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.
    2. Xiaoyu Bian & Guangsu Zhou, 2024. "The effects of robots on internal migration: Evidence from China," Journal of Regional Science, Wiley Blackwell, vol. 64(3), pages 840-865, June.
    3. Michiel Gerritse & Zhiling Wang & Frank van Oort, 2024. "Industrial Transfer Policy in China: Migration and Development," Tinbergen Institute Discussion Papers 24-020/VIII, Tinbergen Institute.
    4. Ye, Juntao & Cai, Liming & Shi, Xinjie & Cheng, Mingwang, 2024. "Pursuing a brighter future: Impact of the Hukou reform on human capital investment in migrant children in China," China Economic Review, Elsevier, vol. 85(C).
    5. Wu, Feifei & Xu, Peipei & Gao, Bo & Ma, Jing, 2024. "Export contraction and input switching in an aging China," China Economic Review, Elsevier, vol. 85(C).
    6. Kaizhi Yu & Yao Shi & Jiahan Feng, 2024. "The influence of robot applications on rural labor transfer," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-18, December.
    7. Chen, Zhu & Shang, Qianqian & Zhang, Jipeng, 2024. "Recent progress in hukou reform and labor market integration in China: 1996–2022," China Economic Review, Elsevier, vol. 87(C).
    8. Zhang, Guangnan & Lin, Junjie, 2024. "The local driving safety effect of motorcycle restrictions: Evidence from China," Transport Policy, Elsevier, vol. 153(C), pages 222-236.
    9. Mustafa Özer & Jan Fidrmuc, 2024. "Does Immigration Affect the Natives’ Mental Health? Causal Evidence from Forced Syrian Migration to Turkey," CESifo Working Paper Series 11399, CESifo.

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