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China's mobility barriers and employment allocations

Ngai, L. Rachel and Pissarides, Christopher and Wang, Jin (2018) China's mobility barriers and employment allocations. CFM Discussion Paper Series, CFMDP2018-11. Centre for Macroeconomics, The London School of Economics and Political Science, London, UK.

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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 perfect competitive rental market would correct this inefficiency. The local restrictions on social transfers favour rural enterprises over urban employment with a relatively smaller impact on industrialization.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.centreformacroeconomics.ac.uk/Home.aspx
Additional Information: © 2018 Centre for Macroeconomics
Divisions: Centre for Macroeconomics
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
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
Sets: Research centres and groups > Centre for Macroeconomics
Date Deposited: 23 Apr 2018 15:54
Last Modified: 23 Apr 2018 15:54
URI: http://eprints.lse.ac.uk/id/eprint/87619

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