Working Paper: CEPR ID: DP12578
Authors: Giovanni Facchini; Maggie Y Liu; Anna Maria Mayda; Minghai Zhou
Abstract: We analyze the effect of China's integration into the world economy on workers in the country and show that one important channel of impact has been internal migration. Specifically, we study the changes in internal migration rates triggered by the reduction in trade policy uncertainty faced by Chinese exporters in the U.S. This reduction is characterized by plausibly exogenous variation across sectors, which we use to construct a local measure of treatment, at the level of a Chinese prefecture, following Bartik (1991). This allows us to estimate a difference-in-difference empirical specification based on variation across Chinese prefectures before and after 2001.We find that prefectures facing the average decline in trade policy uncertainty experience an 18 percent increase in their internal in-migration rate -- this result is driven by migrants who are ``non-hukou", skilled, and in their prime working age. Finally, in those prefectures, working hours of ``native'' unskilled workers significantly increase -- while the employment rates of neither native workers nor internal migrants change.
Keywords: hukou; immigration; internal migration; trade policy uncertainty
JEL Codes: F22; F63; J61; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| reduced trade policy uncertainty (F13) | internal in-migration rate (F22) |
| reduced trade policy uncertainty (F13) | working hours of native unskilled workers (J38) |
| reduced trade policy uncertainty (F13) | employment rates of native workers and internal migrants (J68) |