Labor migration, human capital agglomeration and regional development in China

Abstract

We estimate a skill-based directional migration model to assess the effects of regional human capital agglomeration on labor migration in China. Upon accounting for regional differentials in skill-based compensation, cost-of-living, amenities, and the like, model estimates indicate the importance of destination human capital concentration to high-skill migrants. In marked contrast, low-skill migrants are found to have little incentive to co-locate with high-skill workers, likely reflecting institutional and other impediments to human capital investment among low-skill migrants. Research findings suggest the importance of human capital agglomeration benefits to disparate regional growth trajectories in China. © 2011 Elsevier B.V.