Migrants and Firms: Evidence from China

This seminar is part of the Department of Economics Seminar Series 2017-18. The seminars are open to all - no registration necessary. If you would like to receive email notification of the Department’s seminars, please send your request to Kim.Edmunds.1@city.ac.uk.

Abstract

Speaker: Dr Marlon Seror (University of Bristol)

This paper estimates the causal impact of rural migrant inflows on urban firms in China between 1998 and 2007. We combine international agricultural commodity price shocks with a gravity model to isolate exogenous variation in rural-to-urban migration.

Using a census of above-scale firms covering most of the manufacturing sector, we find that migrant inflows decrease labor costs, and increase employment at destination. As capital does not adjust, the labor supply shift strongly affects the factor mix for the average urban firm. There are wide disparities across firms: employment growth is concentrated on capital-rich, private and exporting firms.

Overall, rural-urban migration alleviates labor misallocation across production units of the same sector and fosters manufacturing growth.

(Co-authors: Clement Imbert, Yifan Zhang, Yanos Zylberberg)