Abstract
AbstractThis paper draws upon a quasi‐natural experiment of county‐city mergers in China to examine whether state‐led urbanisation makes a difference in local labour markets. Based on the difference‐in‐differences framework and three waves of data from the China Household Finance Survey, we show that, on the urban fringe, residents' probability of working in nonagricultural sectors increased by 6.69 percentage points after the policy. Residents responded mainly by shifts from the agriculture sector to being self‐employed. The results indicate that, after fringe counties connect to the corresponding big city in substance, residents in peripheral areas could benefit from the positive spillover effect from large cities and gain employment.
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