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Journal of Labor Economics Vol. 42 No. 1 2024

The Local Labor Market Effect of Relaxing Internal Migration Restrictions: Evidence from China

Lei An1,2,3,4; Yu Qin1,2,3,4; Jing Wu1,2,3,4; Wei You1,2,3,4

1 Chongqing University · 2 National University of Singapore · 3 Peking University · 4 Tsinghua University

Abstract

We study how a significant relaxation of internal migration restrictions affects labor market outcomes of incumbent migrants and natives, exploiting the 2014 hukou reform in China, which substantially removed the migration barriers of cities with an urban population below 5 million (nonmegacities). Using a difference-in-differences method, we find that migrants’ wages in nonmegacities experienced approximately a 2.6%–7.9% decline relative to that in megacities after the policy. The policy had nonnegative impacts on the wages of natives in nonmegacities. These results suggest that the downward wage pressure imposed by new migrants falls primarily on incumbent migrants rather than on natives.

DOI
10.1086/722620
Volume
42
Issue
1
Pages
161-200
Language
en
Sources
openalex crossref bibtex:phds-export.bib

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