The Impact of Migration on Urban Wage and Welfare:An Analysis based on Spatial Equilibrium Model
This paper examines the impacts of migration on urban wage and welfare by building a spatial equilibrium model with labor heterogeneity and agglomeration externality,and conduct-ing parameter estimation and counterfactual analysis based on the population sample survey data in 2005 and 2015.The study finds that,firstly,rural migrants generate agglomeration external-ities in urban labor market and have substitution(complementary)effects on low-skilled (high-skilled)urban workers,leading to a slight decline in urban low-skilled wage,and a sig-nificant rise in urban high-skilled wage.Secondly,population inflow drives up urban housing cost as well as rental income of house owners,and results in overall welfare gains for urban resi-dents,but welfare losses for urban low-skilled renters.Thirdly,rural population benefits greatly from access to higher wages in cities.Overall,the reduction in rural-urban migration cost from 2005 to 2015 increase national welfare by 4％-5％.Therefore,further rural-urban migration will improve social welfare,but land and housing resources should be allocated according to the di-rection of population flow so as to reduce the welfare loss of certain urban population.
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