This paper quantitatively studies the local welfare impacts of inter-city migration in China.
We structurally estimate a trade model with endogenous migration decisions using data from
279 prefecture-level cities. The results suggest that inflows of migrant workers increase
welfare in the destination cities between 2000 and 2005 despite their negative impacts on
congestion and nominal wage. The positive local impacts of migration depend crucially on
the endogenous firm entry. The positive impacts in the destination cities also spill over to the …