Home >> Working Paper
Urbanization, Economic Agglomeration, and Employment Multiplier Effects in China
Read        DownLoad
TitleUrbanization, Economic Agglomeration, and Employment Multiplier Effects in China  
AuthorYuan Zhigang and GaoHong  
OrganizationSchool of Economics, Fudan University; 
Key WordsPlace-based policy; Employment multiplier effect; Urbanization; Economic agglomeration 
AbstractWhether 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 NumberWP511 
  • Institute of Economics, Chinese Academy of Social Sciences
  • Copyright Economic Research Journal
  • The uploaded articles by this website express the authors’ views, not necessarily the views of this website.
  • Perennial Legal Counsel: Lu Kang (Chong Guang Law Office)
  • ISSN 0577-9154 CN 11-1081/F Postal Distribution Code 2-25l (Domestic) M16 (Overseas)
  • ICP 10211437 (Beijng)
  • No.2,Yuetan Bei Xiaojie, Xicheng District, Beijing 100836, P. R. China
  • Phone/Fax: (+8610) 68034153