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Market Potential, Thick Labor Market and Employment

【Authors】
YIN Jinghua & HAN Feng
【WorkUnit】
YIN Jinghua (Nankai University, 310071)HAN Feng (Nanjing Audit University, 211815)
【Abstract】

Relying on the expansion and spatial interaction of market demand and labor supply is of great significance to the realization of the adequacy and balance of urban employment in China. This paper develops a spatial model that incorporates geography of trade costs and labor mobility with heterogeneous worker preferences across locations and then constructs the market demand potential index and the labor supply access index to analyze the correlation with urban employment and the employment opportunities of the individual. The study finds that the market potential of urban products and the thick labor market have prominent effects in promoting urban employment growth and the employment probability of individual workers in the non-agricultural industry. The analysis also reveals that the market potential is more conducive to the employment of the migrants, while the labor market access improves both of the employment opportunities of the migrants and local labor force, but is more conducive to the employment of the latter. These findings provide references for the construction of urban pattern dominated by urban agglomerations to promote regional economic development and to ensure the adequacy and fairness of employment as a whole.

JEL: J21, R12

【KeyWords】
Market Potential, Labor Market Access, Urban Employment