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Skill-Biased Imports, Skill Acquisition, and Migration

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  • Jingting Fan
  • Lei Li

Abstract

Imported capital goods, which embody skill-complementary technologies, can increase the supply of skills in developing countries. Focusing on China and using a shift-share design, we show that city-level capital goods import growth increases the local skill share and that both skill acquisition and migration play a role. We develop and quantify a spatial equilibrium model with these two mechanisms to examine the aggregate effects of capital goods imports, accounting for trade and migration linkages between cities. Counterfactual experiments suggest that the growth in capital goods imports in China between 2000 and 2010 led to a 3.7-8.9 million increase in the stock of college graduates, representing 5.7-13% of the total increase over this period. However, this growth disproportionately favored coastal regions, exacerbating existing spatial disparities.

Suggested Citation

  • Jingting Fan & Lei Li, 2023. "Skill-Biased Imports, Skill Acquisition, and Migration," CESifo Working Paper Series 10512, CESifo.
    • Handle: RePEc:ces:ceswps:_10512
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp10512.pdf
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    References listed on IDEAS

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    1. Jingting Fan, 2019. "Internal Geography, Labor Mobility, and the Distributional Impacts of Trade," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(3), pages 252-288, July.
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    Cited by:

    1. Xiaohua Bao & Qin Chen & Zibin Huang & Lei Li & Mengyuan Wang, 2025. "Defensive Innovation: Technological Rivalry and College Major Choice," CRC TR 224 Discussion Paper Series crctr224_2025_645, University of Bonn and University of Mannheim, Germany.
    2. Chen, Wen & Xue, Wei, 2024. "The impact of capital goods trade liberalization on regional labor market in China," China Economic Review, Elsevier, vol. 86(C).

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    More about this item

    Keywords

    imported capital goods; capital-skill complementarity; skill acquisition; migration;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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