Urbanization, Economic Agglomeration, and Employment Multiplier Effects in China
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| Title | Urbanization, Economic Agglomeration, and Employment Multiplier Effects in China
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| Author | Yuan Zhigang and GaoHong |
| Organization | School of Economics, Fudan University |
| Email | zgyuan@fudan.edu.cn；gaohongfd@gmail.com |
| Key Words | Place-based policy; Employment multiplier effect; Urbanization; Economic agglomeration |
| Abstract | Whether place-based policies are effective or not is a central topic in urban economics. The magnitude of employment multiplier effect is of great importance for local government policies. Using city level employment data from China in 2003-2009, the multiplier effect of manufacturing employment on local service employment is investigated. Regression results from instrumental variable estimations of fixed-effect models show that manufacturing employments have significantly positive influences on local service employments. Every one percentage increase in manufacturing jobs increases the city’s service jobs by 0.397 percentage points. The multiplier effect is the largest for consumer services. Besides, we find that employment multiplier effect is influenced by urbanization and city scale. Manufacturing employments only increase service jobs in cities with higher urbanization levels or larger city scales. In those less urbanized or smaller cities, however, manufacturing employments actually decreases service employments due to crowding out effects. |
| Serial Number | WP511 |
| Time | 2013-10-15 |
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