Business Intelligence

Migration And Economic Growth In China: The Role Of Knowledge And Human Capital Spillovers

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Executive Summary

The authors apply a skill-based directional migration model to examine the importance of knowledge and human capital spillovers to China's economic development. Those spillovers augment private investment in idea discovery and human capital and are central to modern theories of spatial equilibrium and endogenous economic growth (Romer 1986 and 1990, Lucas 1988 and 2004, and Glaeser and Gottleib 2009). Upon accounting for regional differentials in skill-based compensation, cost-of-living, and natural and other amenities, model estimation indicates that high-skill migrants attach significant importance to knowledge and human capital spillovers arising from FDI and human capital concentration in destination regions.

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