Essays on land and labor in urbanizing China

Abstract

In this dissertation I address emerging land and labor issues associated with the rapid urbanization in China over the past decades, including the negative effects of the real estate booms on manufacturing development, land conflicts, and gender inequality among migrants. The thesis consists of six chapters. Chapter 1 offers an introductory discussion on the overarching objective and specific questions of the whole research. Chapter 2 focuses on the effects of housing price appreciation on firm investment. I find a robust negative relationship between local housing prices and the investment of manufacturing firms. A detailed examination of the underlying mechanism probes that it is mainly due to a Dutch disease effect of the real estate price boom: rising housing prices push up wages and other production costs for manufacturing firms and therefore reduce the incentive to invest. Chapter 3 applies a difference-in-differences approach to identify the intra-industry resource allocation effects of the real estate boom. The results show that industries intrinsically highly linked with real estate sectors experienced increasing heterogeneity in firm total factor productivity (TFP), suggesting sorting-in or expansion of less-efficient firms in more real-estate-exposed industries. Chapter 4 investigates the effects of foreign direct investment and fiscal decentralization on jurisdictional land conflicts. The results show that the FDI growth rate has a positive and significant impact on the growth rate of illegal land use when there is a high degree of fiscal decentralization. It thus suggests that FDI inflows trigger tensions over land in provinces with a high degree of fiscal decentralization. Chapter 5 examines the wage gap between female and male rural-urban migrant workers in China. I test whether the differences can be attributed to human capital characteristics, gender discrimination or other factors. I find a relative small gender wage gap of 16-18%, and that most of the gender wage gap cannot be attributed to gender differences in observed characteristics. In addition, the paper documents important differences in factors affecting gender wage gaps between the sub-sample of migrants living at their workplace and those living at urban communities. Chapter 6 synthesizes the findings in each chapter, discusses their value-added to related literature, and presents recommendations for policy-making and future research.