Spatial mismatch, enclave effects and employment outcomes for rural migrant workers: Empirical evidence from Yunnan Province, China

Abstract

The process of rapid urbanisation in China is causing rural migrant workers to experience increasing spatial mismatch and enclave effects. In the existing literature, no specific study has been conducted on the degree to which the spatial mismatch and enclave effects are related to employment outcomes. Extending upon the findings of existing research, this study separates the impact of spatial mismatch and that of the enclave effects for the first time. This study therefore investigates the influence of spatial mismatch and enclave effects on the employment and household incomes of individual migrant workers in the underdeveloped regions of Yunnan province in western China. This study is based on cross-sectional data from the 2015 rural migrant worker urban integration household survey in Yunnan province. After controlling for other influencing factors, the instrument variable probit and two-stage least square models were used to estimate the impact of housing location, commute time and social interactions on the employment propensity and household income of migrant workers. The empirical results revealed that commute time has no significant effect on the employment propensity of migrant workers, whilst it does have a significant negative impact on the household incomes of migrant workers. The number of friends and relatives that individual migrant workers interact with also has a significant positive impact on their employment propensities and incomes. These marginal effects vary across different cities. Rural migrant workers who reside in larger cities are more likely to have enhanced employment prospects and higher incomes. Overall, the findings suggest that both spatial mismatch and enclave effects exist in the Chinese labour market. Further tests confirm the robustness of our findings.