Event Oct/17
Fu Shihe: Learning in Chinese Cities: Do Rural Migrants Benefit from Agglomeration Economies?

Cities facilitate learning and human capital accumulation. In a dense, local labor market, workers can benefit from knowledge spillovers and therefore enhance their productivity. This is supported by many empirical studies from developed countries. Less is known in cities in developing countries. Using micro data from the 2004 manufacturing census and 2005 population census in China, we find that overall workers benefit from labor market pooling and knowledge spillovers in Chinese cities, but rural migrants benefit much less than do local urban residents. This is not because rural migrants are low skilled or work in informal sectors. This may be because they lack social network and suffer “double discrimination” for being “rural” and being “migrant.” Our findings suggest that social interactions in cities provide a channel of learning alternative to formal schooling. Our findings also have policy implications on how Chinese cities can become “skilled” during the rapid urbanization process coupled with global competition.

Shihe Fu received his Ph.D. in economics from Boston College in 2005. He is a professor at Southwestern University of Finance and Economics in China and currently a Fulbright visiting scholar at the MIT Center for Real Estate. His research focuses on housing, labor, and environmental issues in cities. His papers appear in Journal of Public Economics, Journal of Labor Economics, Journal of Urban Economics, Journal of Regional Science, and Urban Studies.


Recommended Reading List:

Cities and skills, by E. Glaeser and D. Maré, Journal of Labor Economics 19(2001), pp. 316-342.

Communication externalities in cities, by S. Charlot and G. Duranton, Journal of Urban Economics 56 (2004), pp.581–613.

Do rural migrants benefit from urban labor market agglomeration economies? Evidence from Chinese cities, by G. Yang, L. Li, and S. Fu, 2016, Working Paper. Available upon request: shihefu@mit.edu.