Economic institutions that impede factor mobility become more costly when an economy experiences substantial transitions such as trade liberalization. I study how trade triggers changes in labor institutions that regulate internal migration in the context of China’s Hukou system. Using a newly-collected dataset on prefecture-level migration policies, I document an increase in pro-migrant regulations following WTO entry and estimate the impact of prefecture-level trade shocks on migration regulations from 2001 to 2007. I find that regions facing more export market liberalization enacted more migrant-friendly regulations.
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Yuan Tian
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