Abstract

Because of the hukou system in China, the number of migrating workers without local hukou status becomes a popular proxy of labor movements, which significantly underestimates both the size and quality of inter-provincial migration. Using the 2000 and 2010 census data, we develop a theoretic model to estimate the moving costs across provinces. Our results show that migrating worker on average loses 46% of utility in 2000 and 2010. We conduct a series of counterfactual analyses, we find that the reallocation of workers accounts for about 7% to 8% increase of per capita GDP during the decade. Moreover, promoting hukou reform and improving transportation infrastructure would encourage a large amount of workers to move into these prosperous provinces in the east, whereas regional economic convergence can alleviate these challenges.

        Keywords: Inter-Provincial Migration; Migration Cost; Regional Economic Growth

        JEL: J61; O18; R23;