Trade, Migration, and Productivity: A Quantitative Analysis of China
- (pp. 1843-72)
Abstract
We study how goods- and labor-market frictions affect aggregate labor productivity in China. Combining unique data with a general equilibrium model of internal and international trade, and migration across regions and sectors, we quantify the magnitude and consequences of trade and migration costs. The costs were high in 2000, but declined afterward. The decline accounts for 36 percent of the aggregate labor productivity growth between 2000 and 2005. Reductions in internal trade and migration costs are more important than reductions in external trade costs. Despite the decline, migration costs are still high and potential gains from further reform are large.Citation
Tombe, Trevor, and Xiaodong Zhu. 2019. "Trade, Migration, and Productivity: A Quantitative Analysis of China." American Economic Review, 109 (5): 1843-72. DOI: 10.1257/aer.20150811Additional Materials
JEL Classification
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- F16 Trade and Labor Market Interactions
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- P23 Socialist Systems and Transitional Economies: Factor and Product Markets; Industry Studies; Population
- P25 Socialist Systems and Transitional Economies: Urban, Rural, and Regional Economics
- R12 Size and Spatial Distributions of Regional Economic Activity
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics