Sunday, Jan. 3, 2021 3:45 PM - 5:45 PM (EST)
- Chair: Rui Du, Oklahoma State University
College Location and Migration: Evidence from China’s Higher Education Expansion
AbstractUsing college enrollment data and the 1% national sample-census population data, this paper examines the impact of college education expansion on individual decisions about education and mobility. We first use the within- and cross-province variation in college expansion intensity to show that the educational supply shock determines the likelihood of college attendance. Conditional on college location, we then infer the migration patterns of college graduates by comparing their work locations to their birthplaces. There is suggestive evidence that attending college in the birth province is significantly affected by in-province college expansion while out-province college attendance decision is mostly driven by the expansion outside the birth province. Furthermore, college graduates are significantly more likely to live in non-birth-provinces later in life. Our findings suggest that college location impacts college graduates’ geographic mobility in an equally important way as college education does.
The Effect of Infrastructure Development on Urban-Rural Price Differences in China
AbstractMarket liberalization reforms in China have given rise to greater domestic market integration. However, large urban-rural price differences indicate that the segregation of the urban and rural markets still exists in China. We study evolution of price differences between urban and rural areas across 31 Chinese provinces and municipalities over the period of 1985 and 2018. First, we show that while there is an evidence of convergence separately for urban markets and for rural markets in China, the gap between urban and rural price levels within each province still remains large and persists over time. However, we find that the urban-rural price gap has shrunk after 2000, when China adopted the Price Law resulted in liberalization of prices. This is suggestive of deeper urban-rural integration associated with policy changes. In addition, we record notable differences in urban-rural price gaps between provinces, however, using the log-t test we find an evidence of regional convergence of these price gaps. Finally, we investigate the effect of transport infrastructure development on the urban-rural price differences. The regression results show that highway- and railway-related variables have strong negative effect on the urban-rural price divide, indicating that infrastructure development is conducive to market integration between urban and rural areas in China. Therefore, further improvement of infrastructure can promote the process of urban-rural economic integration across and within Chinese provinces, and this could became a main focus of the China’s rural revitalization strategy introduced in 2018.
Expressways, Market Access, and Industrial Development in China: Using Panel Instrumental Variables of Minimum Spanning Tree
AbstractMass investment in transportation infrastructure is appealing to policymakers of in large developing countries, as transportation plays a fundamental role in fostering regional growth, promoting industrial development, and shaping economic geography. This paper takes China’s National Expressway Network, a mega-project initiated in the 1990s and still in expansion, as a quasi-natural experiment, and it studies how the expansion of the network improves market access, and how the ameliorated market access influences industrial development and firm performance from both the extensive and intensive margin.
We measure the impact of the network expansion on the county-level market access using the first-order approximation of market access in Donaldson and Hornbeck’s (2016) general equilibrium model. A critical parameter of that market access is a power-decay parameter. We provide the first estimate of this parameter in China’s regional context using data of Chinese Customs.
To address the endogenous placement decision of expressways, we innovate a set of instrumental variables for panel data. Specifically, we extend the method of Faber (2014) to predict the dynamic expansion of a hypothetical minimal-spanning-tree (MST) network and construct panel IVs. To address the concern of the MST method’s endogeneity arising from the target cities, we draw the inspiration from Ioannides and Zhang (2017) and use China’s wall-city data of the 19th century to estimate the target cities.
The paper finds that between year 2000 and 2009, the market access growth facilitated by the expressway network expansion significantly bolstered the number of firms and their capital accumulation in Chinese counties. Capital-intensive manufacturing industries benefit more from the market access growth and are more inclined to concentrate in better-accessed locations; market access growth is more substantial in less-developed inland provinces and their urban cores. The findings shed light on the dramatic transitions in economic geography in China since the new millennium.
Pennsylvania State University
University of Rochester
National University of Singapore
University of Nottingham Ningbo China
- R1 - General Regional Economics