Asian Perspective Seminar - Ben Zou (Purdue)

Title: Migration restrictions, college choices, and spatial skill sorting

Abstract: When choosing where to attend college, students may also consider future job opportunities in the city where the college is located, especially when post-graduation mobility is limited by migration frictions. This paper examines how such frictions shape college choices in China, where mobility is constrained by both formal migration restrictions and informal barriers. Using a national administrative dataset on four-year college admissions from 2005 to 2011, we show that relaxing migration restrictions through hukou reforms enabled colleges in cities that implemented reforms to attract higher-quality students. The largest gains occurred at colleges located in cities that are economically more developed than students’ origins, consistent with improved local labor market prospects as the underlying mechanism. Counterfactual analysis based on a college choice model indicates that expanding hukou access to higher-wage cities strengthens the sorting of stronger students toward those destinations. However, when informal migration frictions are lower, students face lower post-graduation migration costs and become less sensitive to wages in college cities; as a result, sorting toward high-wage destinations weakens. Aggregate welfare increases as migration restrictions are eased, although the gains are unevenly distributed. These results highlight the role of both formal and informal migration frictions in shaping spatial skill sorting and welfare.