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China's mobility barriers and employment allocations

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  • Ngai, L. Rachel
  • Pissarides, Christopher
  • Wang, Jin

Abstract

China's hukou system imposes two main barriers to population movements. Agricultural workers get land to cultivate but are unable to trade it in a frictionless market. Social transfers (education, health, etc.) are conditional on holding a local hukou. We show that the land policy leads to over-employment in agriculture and it is the more important barrier to industrialization. Effective land tenure guarantees and a perfect competitive rental market would correct this inefficiency. The local restrictions on social transfers favour rural enterprises over urban employment with a relatively smaller impact on industrialization.

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  • Ngai, L. Rachel & Pissarides, Christopher & Wang, Jin, 2018. "China's mobility barriers and employment allocations," LSE Research Online Documents on Economics 87619, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:87619
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    Cited by:

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    3. Bairoliya, Neha & Miller, Ray, 2021. "Social insurance, demographics, and rural-urban migration in China," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    4. Cui, Kun & Li, Bo & Wang, Hanyang, 2021. "Quantitative analysis of health insurance reform in China: Pure consolidation or universal health insurance?," Economic Modelling, Elsevier, vol. 101(C).
    5. Tasso Adamopoulos & Loren Brandt & Jessica Leight & Diego Restuccia, 2022. "Misallocation, Selection, and Productivity: A Quantitative Analysis With Panel Data From China," Econometrica, Econometric Society, vol. 90(3), pages 1261-1282, May.
    6. Shawn Xiaoguang Chen & Yudan Cheng & Liutang Gong & Wenjia Tian, 2023. "A Big Push of Panda from the Ground: Land Subsidy and Structural Transformation in China," Economics Discussion / Working Papers 23-09, The University of Western Australia, Department of Economics.
    7. Waxman, Andrew & Liang, Yuanning & Li, Shanjun & Barwick, Panle Jia & Zhao, Meng, 2020. "Tightening belts to buy a home: Consumption responses to rising housing prices in urban China," Journal of Urban Economics, Elsevier, vol. 115(C).
    8. Holger Sieg & Chamna Yoon & Jipeng Zhang, 2023. "The Impact Of Local Fiscal And Migration Policies On Human Capital Accumulation And Inequality In China," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 57-93, February.
    9. Mark Colas & Suqin Ge, 2019. "Transformations in China’s Internal Labor Migration and Hukou System," Journal of Labor Research, Springer, vol. 40(3), pages 296-331, September.
    10. Monteforte, Fabio, 2020. "Structural change, the push-pull hypothesis and the Spanish labour market," Economic Modelling, Elsevier, vol. 86(C), pages 148-169.
    11. Chuantao Cui & Leona Shao‐Zhi Li & Daoju Peng, 2021. "Value‐added exports and the skill premium: Evidence from China’s international and regional production networks," Pacific Economic Review, Wiley Blackwell, vol. 26(2), pages 183-211, May.
    12. Ye, Maoxin & Lyu, Zeyu, 2020. "Trust, risk perception, and COVID-19 infections: Evidence from multilevel analyses of combined original dataset in China," Social Science & Medicine, Elsevier, vol. 265(C).

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    More about this item

    Keywords

    Chinese immigration; Chinese land policy; imperfect rental market; mobility barriers; hukou registration; social transfers;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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