Trade, Migration, and Productivity: A Quantitative Analysis of China

Tombe, Trevor; Zhu, Xiaodong

doi:10.1257/aer.20150811

Cited by 337 publications

(232 citation statements)

References 40 publications

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“…59 Other interesting topics to apply this framework are the quantification of the effects of trade agreements and other changes in trade policy on internal labor markets and the impact of migration across countries. In addition, it can be used to study the transmission of regional and sectoral shocks across a production network when trade and factor reallo-59 There is a rapid and growing interest to answer these types of questions; see, for instance, Fajgelbaum, Morales, Serrato, and Zidar (2019), Ossa (2015), and Tombe and Zhu (2015). cation is subject to frictions.…”

Section: Resultsmentioning

confidence: 99%

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Trade and Labor Market Dynamics: General Equilibrium Analysis of the China Trade Shock

Caliendo¹,

Dvorkin

Parro³

2019

ECTA

391

295

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We develop a dynamic trade model with spatially distinct labor markets facing varying exposure to international trade. The model captures the role of labor mobility frictions, goods mobility frictions, geographic factors, and input‐output linkages in determining equilibrium allocations. We show how to solve the equilibrium of the model and take the model to the data without assuming that the economy is at a steady state and without estimating productivities, migration frictions, or trade costs, which can be difficult to identify. We calibrate the model to 22 sectors, 38 countries, and 50 U.S. states. We study how the rise in China's trade for the period 2000 to 2007 impacted U.S. households across more than a thousand U.S. labor markets distinguished by sector and state. We find that the China trade shock resulted in a reduction of about 0.55 million U.S. manufacturing jobs, about 16% of the observed decline in manufacturing employment from 2000 to 2007. The U.S. gains in the aggregate, but due to trade and migration frictions, the welfare and employment effects vary across U.S. labor markets. Estimated transition costs to the new long‐run equilibrium are also heterogeneous and reflect the importance of accounting for labor dynamics.

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Section: Resultsmentioning

confidence: 99%

“… There is a rapid and growing interest to answer these types of questions; see, for instance, Fajgelbaum, Morales, Serrato, and Zidar (), Ossa (), and Tombe and Zhu (). …”

mentioning

confidence: 99%

Trade and Labor Market Dynamics: General Equilibrium Analysis of the China Trade Shock

Caliendo¹,

Dvorkin

Parro³

2019

ECTA

391

295

View full text Add to dashboard Cite

show abstract

“…Given the computed parameter values, we then use equations (44) and (43) to calculate (with taking its computed values) the employment allocations when the rental market for land is e¢ cient ( = 1) and there is no hukou-based discrimination in subsidies ( = 1): This delivers the "second-best,"or "constrained-e¢ cient" employment allocations. We then derive the impact of the land policy and the social subsidization by comparing the predicted employment allocations to the second best allocation.…”

Section: Other Labour Market Wedgesmentioning

confidence: 99%

China’s Mobility Barriers and Employment Allocations

Ngai

Pissarides

Wang

2018

Journal of the European Economic Association

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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. E¤ective land tenure guarantees and a perfect competitive rental market would correct this ine¢ ciency. The local restrictions on social transfers favour rural enterprises over urban employment with a relatively smaller impact on industrialization.

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“…Variable defi nitions are the same as in Equations (10) and (11). 13 The explanatory power of each explanatory variable in the regressions may be overestimated because of the omission of other factors of labor market mobility, such as migration costs resulting from the hukou system in China (Fan, 2019;Tombe and Zhu, 2019;Ma and Tang, 2020).…”

Section: ) Theoretical Expectation and Empirical Evidencementioning

confidence: 99%

“…Another strand of literature investigated how labor market frictions affect aggregate productivity and regional economic disparities. For example, given the fact that China has a hukou (household registration) system that imposes high costs for working and living outside one's hukou registration region (primarily through restricted access to social services and limited employment rights), Tombe and Zhu (2019) quantifi ed the magnitude and consequences of trade and migration costs. They found that the costs of trade and migration were high in 2000 but declined afterward.…”

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confidence: 99%

What Factors Can Explain the Rising Spatial Disparity in Economic Activities in China?

Yang

Cheng

Lan

et al. 2020

China and World Economy

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This paper explores the impact of spatial externalities in shaping China's economic geography by establishing a theoretical framework that contains regional productivity, trade barriers and local amenities to capture spatial externalities between different regions over time. Combining provincial data on bilateral trade flows with observed information about economic geography during the period 1998–2013, we estimate the distribution and marginal contribution of each explanatory factor. Empirical results suggest that regional labor density and wage are positively related to exogenous productivity and amenities, and negatively related to trade barriers. Meanwhile, variation in the marginal contribution of exogenous productivity and amenities and trade barriers reflects the regional temporal–spatial features in China's recent marketization process. Therefore, the Chinese government should place more emphasis on absorbing advanced technologies and reducing inter‐regional market barriers to promote balanced regional development and improve the efficiency of China's spatial resource allocation.

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Trade, Migration, and Productivity: A Quantitative Analysis of China

Cited by 337 publications

References 40 publications

Trade and Labor Market Dynamics: General Equilibrium Analysis of the China Trade Shock

Trade and Labor Market Dynamics: General Equilibrium Analysis of the China Trade Shock

China’s Mobility Barriers and Employment Allocations

What Factors Can Explain the Rising Spatial Disparity in Economic Activities in China?

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