Study Of Population Migration And Regional Economic Development Differences

Joseph E.Stiglitz, Nobel Prize winner in Economics in 2001, said "the two themes that will significantly affect the development of human beings in the 21st century are the urbanization in China and high tech development in the United States." The most massive migration is taking place in China. With the population migration, the urbanization and urban economy are developing rapidly as well. To some extent, China's urban population migration becomes an important component of urbanization in China. Therefore, it is an important theoretical and practical significance to study population migration.Since the reform and opening up, differences in regional economic development continually increase because of the political system changes and the economic restructuring, which becomes the most important factor that affects the population migration. The studies of the relation between population migration and regional economic development in China are mostly on the province level instead of on the city level. Considering the fact of China's extensive territory, large population and great regional economic disparities in China, it is not accurate enough to study the population migration only on the provincial-level. Moreover, from the perspective of econometrics, the small quantity of the samples in the econometric analysis, which is limited by the province number in China, would affect the reliability of the results. Therefore, this paper studies the population migration and regional economic development differences on the city-level.Questions addressed in this thesis are the followings: What is the current situation of inter-city population migration? Are there any differences in the population migration between inter-city and inter-province? How do the economic development and population change affect each other? How does the population migration affect the economic development in east China, west China and central China? What is the current situation of and what can be referenced as the urban migration and the economic development in metropolis, the engine of national economic development? Is the "center- periphery" theory in space economics able to explain the population migration in China? How are the macroeconomic policies able to better encourage migration, to better gain the demographic bonus, and to promote the harmonious development of regional economy faster?This thesis is organized as the following: First, the overall trend of regional distribution of population and economic activities in the last 30 years in China is described. The inter-city population migration is investigated by using the fifth census data in 2000, from which the general rule of population migration in China is investigated. The urban population migration and urban economies development are investigated through the three metropolitan regions (Beijing, Shanghai and Guangdong), which are the most developed areas in China and may be called "central region". The evolution of the manufacturing structure and labor force changes in the "central region" are investigated, and how to gain demographic bonus by population migration are discussed as well.Secondly, city samples are quantitatively analyzed using econometrics method, and how population migration and the regional economic development may affect each other is investigated extensively. Specifically, how does the situation of focusing on manufacturing while ignoring agriculture affect the regional economy? How does the population migration affect the regional economic development speed? How does the "brain drain" affect the economic development in central and west regions? How does human capita] affect the regional economy? What is the compulsory education requirement for minors who immigrate with their parents, and how should the requirement be satisfied?Finally, future population migration is predicted according to the analysis in this thesis, and suggestions to the future policy for the questions addressed above are provided.Conclusions of this thesis are the followings:1.Inter-city population migration activities are basically in line with some of population migration laws proposed by E.GRavenstein. Distance and differences in economic development affect the number and direction of population migration. Specifically, people tend to move to the area nearby and with higher economic development. In addition to this trend, some unseen migration characteristics are found. Specifically, population migration within a province shows the trend of moving from other cities to the capital city of the province, which is most significant in west China, and less significant in mid China. However, people may move to other cities besides the capital cities of the provinces in east China. Although the entirety of east China has a net intake of population in the inter-provincial migration levels, in the inter-city level within a province the population migration is different. For example, people tend to move from non-metropolitan areas to metropolitan ones. There is difference between central and western regions too. Specifically, in central regions almost all cities except the capitals have net emigration, while there are more cities with net immigration besides the capital cities in western regions. These cities are generally either economic centers or ethnic minority areas, although western regions also have a net inter-province emigration.2.Based on these available data, an econometric model using city as the basic region unit is established. Based on empirical analysis on the relation between China's population migration and regional economic development, the observations include the following: (1) the initial development conditions of the regional economy affects the rate of population migration, which include initial urban wage level, the amount of FDI contracts, the per capita arable land area, population size, and the proportion of the farming population, among which the wage level is the most important factor. There is a positive correlation between net population migration and regional economic development. Specifically, net immigration benefits the local economic development, while net emigration does the opposite. The average number of years of education of population shows a significant positive impact on per capita GDP of a city, but the total dependency ratio is negatively correlated with per capita GDP, which means that the demographic bonus in China is more beneficial to economic development. Net migration rate is negatively correlated with wage growth. On the other hand, in the central region wage growth rate is higher than the national average, in line with the experience of developed countries, because abundant supply of labor due to net immigration forces wage to decrease. This may explain why wage growth in Pearl River Delta, which has a large net immigration, is behind other metropolises in recent years. The impact of population migration on regional economy in metropolitan areas is different from the non-metropolitan areas and cities. (2) Population emigration could reduce the size of the market in the central and western regions, but public expenditure plays an important role in the maintenance of the market size in western regions. Development of western regions is very important to reduce the differences between eastern and western regions. Brain drain in western and central regions is significant; the negative effects on the economic development in the population emigration regions will reach maximum in two years, and then subsequently decrease. However, the rate of decrease in western regions will be slower than in central regions. 3.The study of economic development and population migration in metropolitan areas shows: (1) the employment growth rate in the Pearl River Delta is much higher than that in the other two metropolitan areas and the same time national average employment growth rate. In 1990s, although the Yangtze River delta and the Pearl River Delta are both immigration centers, the Pearl River Delta has created much more employment opportunities than the Yangtze River Delta, which demonstrates its strong ability to create jobs and economic vitality. The Pearl River Delta's economic growth is accompanied by high employment growth, while economic growth in the Yangtze River Delta has not brought a corresponding high employment growth. In the periods of 1990-2000 and 2000-2005, employment growth in the Pearl River Delta and Yangtze River Delta had undergone great changes, resulting in a dramatic change in city rank. Generally speaking, the ranks of Suzhou, Wuxi, Changshu, and Jiaxing in the Yangtze River Delta seem to rise quickly, while the ranks of some cities in the Pearl River Delta drop, which corresponds with workers moving from the Pearl River Delta to the Yangtze River Delta for job opportunities as reported in the news. (2) From the proportion change of employment in the manufacturing industries in metropolises to the nation, the development of the manufacturing industry is relatively stable in metropolitan areas. However, in the decade from 1996 to 2005, the competitiveness of manufacturing industrials in the three major metropolitan areas dramatically changed. In 1996, 2000, 2005, the manufacturing employment increases slightly in Beijing area, while the manufacturing employment doubled from 2000 to 2005 in the Pearl River Delta. This showed that the competitiveness of manufacturing industries in the Pearl River Delta increased quickly after 2000 and manufacturing developed very quickly and absorbed most of labor force. The Yangtze River Delta has the largest share of manufacturing employment. The manufacturing employment in the Yangtze River Delta increased in 2000, but decreased in 2005. Meanwhile, the manufacturing employment in the Pearl River Delta largely increased. At the same time, the manufacturing industries gathered to metropolitan areas faster. Specifically, from 1996 to 2000 the proportion of manufacturing industries in metropolitan areas increased by 2.5%, and from 2000 to 2005 it increased by 5.04%. (3) From 1980s to the late 1990s, the wage level in the Pearl River Delta was very competitive, the Yangtze River Delta was the second most competitive, and Beijing area was least competitive. However, in late 1990s most cities in the Pearl River Delta had relatively low wage growth rates. They were generally lower than the same period in the Yangtze River Delta and Beijing area, and provided a sample of population migration negatively correlated with wage growth rate. (4) Influenced by FDI location choice, the specialized economy and urban economy in the Pearl River Delta and Yangtze River Delta developed quickly, while the central and western regions lost their share of the rising industries. Population mainly migrated to the areas where rising industries developed quickest. It is found that the capital cities of the entire central and western provinces lost the manufacturing industries, which may be shown by the studies of the manufacturing "center-periphery" structure in the city-level. The eastern coast regions of China quickly became specialized in manufacturing while central and western regions focused in agriculture. Without outside interference, this structure would be extended. At the same time, among cities in the eastern region, manufacturing industries were more scattered. There had appeared some cities with high level of specialization which originally had weak industrial bases, such as Shenzheng and Dongguan.4.China is in a demographic bonus period, abundant labor force and relatively low dependent population may contribute to economic growth. Since the 1980s, there has been nearly 30 years when the demographic bonus contributed to the economic development in China. However, the "brain drain" and the fact that some local governments prefer capital-intensive industries, this may deviate from China's comparative advantages, go against gaining demographic bonus. According to econometric model, population migration, low dependency ratio, and particularly education will promote per capita GDP.Main policy proposals by this thesis are the followings. Firstly, the government should continue to encourage population migration because population migration will promote economic efficiency. Secondly, economic growth accompanied with employment growth should be the pursued mode. The low employment growth in the Yangtze River Delta reminds us that we must give play to China's comparative advantages, including labor cost advantages, in order to effectively gain demographic bonus. Thirdly, education has a significant positive impact on the economic efficiency. The averaged eight-year education is an important demarcation point. When the number of average education years is larger than eight, education becomes an important factor to promote economic development. Therefore, the government should vigorously implement the nine-year compulsory education to enhance human capital, and effectively solve the problem of children that relocate to a new city with their parents, who can not receive a compulsory education. Fourthly, government should exert the comparative advantages in central and western regions to develop relevant industries, and continue development of western regions, while maintaining a relatively high level of public expenditure. Finally, in a certain period of time, it is better to develop large cities in central and western regions first than to develop small towns.There are three main innovation of this thesis:1.For the first time, this thesis systematically studied the relation between the population migration and the regional economic development difference in the inter-city level. Some new population migration characteristics are observed, which hasn't been observed in the inter-province population migration. Specifically, population migration inside a province tends to move to the capital city first, which is most significant in western regions, and less significant in central regions. There are other cities where people may move to besides the capital city in the province in eastern regions.2.This thesis developed an econometric model, and quantitatively analyzed how population migration with different population attributes and regional economic development affect each other for the first time. For example, this thesis quantitatively analyzed the impact of emigration with age between 24 and 34 years old and between 24 and 64 years old on the western and centra] regions. How to effectively solve the problem of children that relocate to a new city with their parents, who can't receive a compulsory education was also discussed in this thesis too. 3.Integrating population migration and the new space economics theory, this thesis analyzed and explained regional and urban (metropolitan areas) economic development. For example, it is found that the almost all capital cities of the entire central and western provinces are losing the manufacturing share, which may be shown by the studies of the manufacturing "center-periphery" structure in the city-level. Not only at regional and provincial scale, but also at city scale, the eastern coast regions of China are quickly becoming specialized in manufacturing while central and western regions are focusing in agriculture. At the same time, among cities in the eastern region, manufacturing industries are more scattered. There have appeared some cities with high level of specialization which originally had weak industrial bases before.There are also some shortages of this thesis.Firstly, it was difficult to apply structure equation and panel measurement methods for the analysis.Specifically, it was difficult to get continuous time series data because the census is conductedevery ten years. Moreover, there were no city emigration data until the fifth national census in2000. Currently, the only available cross-section inter-city data were between 1995 and 2000, andthere was no income survey on migration population.Secondly, the information available was not sufficient to analyze all cities. Only metropolitan areawas studied in some chapters.