Productivity Gains from Agglomeration and Migration in the People's Republic of China between 2002 and 2013

Abstract

We evaluate the evolution of productivity gains in cities in the People's Republic of China between 2002 and 2013. In 2002, rural migrants exerted a strong positive externality on the earnings of urban residents, which were also higher on average in cities with access to foreign markets through a seaport. In 2007 and 2013, city size (measured in terms of both employment density and land area) was the crucial determinant of productivity. Market access, whether internal or external, played no direct role. Rural migrants still enhanced urban residents’ earnings in 2007 and 2013, though the effect was less than half that in 2002. Urban gains and their evolution over time are very similar on a total and a per hour earnings basis. Finally, skilled workers and females experienced slightly larger gains than unskilled workers and males.

Keywords

• agglomeration economies
• migration
• cities
• urban development
• wage disparities