Global trade and economics
Abstract
Abstract
I examine how migration frictions shape the effects of trade policy by analyzing the impact of tariff reductions on labor allocation in China and the role of hukou-based migration frictions. Trade liberalization induces significant labor reallocation, greater in regions with lower hukou frictions. Quantitatively, trade liberalization increases China's welfare by 0.72%. Abolishing the hukou system directly improves welfare by 1.75% but reduces gains from tariff reductions by 18% and amplifies negative distributional effects. In the process, I develop a novel measure of hukou-related migration frictions.
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@article{scollr2026Trade,
title = {Trade liberalization and the great labor reallocation},
journal = {Graduate Institute Geneva Institutional Repository (Graduate Institute of International and Development Studies)},
year = {2026},
doi = {10.1111/iere.12751},
url = {http://repository.graduateinstitute.ch/record/322102}
}FAQ
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