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“Building Jobs: Employment Stabilization and Construction in China”
[ Abstract ]
This paper studies construction as an employment stabilization tool and its longer-run consequences. Exploiting cross-city variation in exposure to China’s mid-2010s export slowdown, I find that more exposed cities experience substantial manufacturing employment losses followed by increases in construction employment. This construction response is stronger in cities led by officials with stronger career incentives and with larger increases in labor unrest, and it is accompanied by increased emphasis on employment in government work reports. Similar construction responses arise following automation shocks that displace manufacturing workers without reducing economic output, indicating construction expansion as a response to employment pressure. One mechanism to expand construction is through government land sales that facilitate real estate and infrastructure projects. While this strategy mitigates short-run employment losses, it is associated with higher real estate risk in the longer term.
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“Migrant Integration and Social Stability: Evidence from China”
with Weizheng Lai
[ Abstract ]
Contemporary public discourse often raises concerns that migration may threaten social stability, fueling support for exclusionary integration policies. We study this issue by estimating the causal effect of China's recent reform of its internal migration institutions on labor unrest (e.g., strikes). Exploiting variation from the reform's population-based discontinuity rule, we find that the reform significantly reduced labor unrest. A key mechanism is migrants' enhanced settlement intentions: to secure the opportunity of settlement offered by the reform, migrants have weaker incentives to engage in unrest. We show that the reform increased the likelihood of migrants remaining in migration destinations, and through a novel causal mediation analysis, we find that enhanced settlement intentions can explain 63 percent of the reform's effect on labor unrest. Moreover, the reform's effect on labor unrest is more pronounced in places where migrants live closer to their origins or are culturally similar to natives, making them more inclined to stay once the reform lowers institutional integration barriers. We find no evidence that the reform changed migrant composition, significantly improved migrants’ wellbeing, or prompted governments to tighten social control.
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“Geopolitical Tensions and Economic Opportunity: Evidence from Japan”
with Weizheng Lai
[ Abstract ]
Geopolitical tensions may reallocate economic opportunities across countries. We study the economic and political impacts of such shifts, drawing upon the Korean War (1950--1953), one of the most intense geopolitical conflicts in recent history. Using newly digitized data, we show that US military procurement in Japan during the Korean War led to employment growth, labor relocation, and increases in labor productivity in Japan. Meanwhile, we present suggestive evidence that military procurement reduced support for parties opposed to Japan's rearmament (and military alliance). Our findings suggest that geopolitical tensions may generate economic opportunities for some countries and influence their domestic political discourse.
