China’s mobility barriers and employment allocations

Ngai, L Rachel, Pissarides, Christopher A ORCID: 0000-0002-0695-058X and Wang, Jin (2019) China’s mobility barriers and employment allocations. Journal of the European Economic Association, 17 (5). 1617 - 1653. ISSN 1542-4766

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Abstract

China’s hukou system imposes two main barriers to population movements. Agricultural workers get land to cultivate but are unable to trade it in a frictionless market. Social transfers (education, health, etc.) are conditional on holding a local hukou. We show that the land policy leads to over-employment in agriculture and it is the more important barrier to industrialization. Effective land tenure guarantees and a competitive rental market would correct this inefficiency. The local restrictions on social transfers also act as disincentives to migration with bigger impact on urban migrations than to job moves to rural enterprises.

Item Type:	Article
Official URL:	https://academic.oup.com/jeea
Additional Information:	© 2018 The Authors
Divisions:	Economics
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor J Political Science > JV Colonies and colonization. Emigration and immigration. International migration
JEL classification:	J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J61 - Geographic Labor Mobility; Immigrant Workers O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O18 - Regional, Urban, and Rural Analyses R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R23 - Regional Migration; Regional Labor Markets; Population
Date Deposited:	16 May 2019 12:06
Last Modified:	26 Apr 2024 16:03
URI:	http://eprints.lse.ac.uk/id/eprint/100822

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