China's "Great Migration": the impact of the reduction in trade policy uncertainty

Facchini, Giovanni; Liu, Maggie Y.; Maria Mayda, Anna; Zhou, Minghai

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 products, 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 experienced a 24 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 increased, and internal migrants found employment in the places they migrated to.

Citation

Facchini, G., Liu, M. Y., Maria Mayda, A., & Zhou, M. (2019). China's "Great Migration": the impact of the reduction in trade policy uncertainty. Journal of International Economics, 120, 126-144. https://doi.org/10.1016/j.jinteco.2019.04.002

• Journal Article Type: Article
• Acceptance Date: Apr 6, 2019
• Online Publication Date: Apr 25, 2019
• Publication Date: Sep 1, 2019
• Deposit Date: Apr 25, 2019
• Publicly Available Date: Oct 26, 2020
• Journal: Journal of International Economics
• Print ISSN: 0022-1996
• Electronic ISSN: 1873-0353
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 120
• Pages: 126-144
• DOI: https://doi.org/10.1016/j.jinteco.2019.04.002
• Keywords: Hukou; Immigration; Internal migration; Trade policy uncertainty
• Public URL: https://nottingham-repository.worktribe.com/output/1841410
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S0022199619300352?via%3Dihub
• Additional Information: This article is maintained by: Elsevier; Article Title: China's “Great Migration”: The impact of the reduction in trade policy uncertainty; Journal Title: Journal of International Economics; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.jinteco.2019.04.002; Content Type: article; Copyright: © 2019 Elsevier B.V. All rights reserved.