Bosker, MaartenDeichmann, UweRoberts, Mark2015-07-202015-07-202015-06https://hdl.handle.net/10986/22231China has used two main spatial policies to shape its geographic patterns of development: restricted labor mobility through the Hukou residential registration system and massive infrastructure investment, notably a 96,000 kilometer national expressway network. This paper develops a structural new economic geography model to examine the impacts of these policies. Fitting the model to available data allows simulating counterfactual scenarios comparing each policy’s respective impact on regional economic development and urbanization patterns across China. The results suggest large overall economic benefits from constructing the national expressway network and abolishing the Hukou system. Yet, the spatial impacts of the two policies are very different. The construction of the national expressway network reinforced existing urbanization patterns. The initially lagging regions not connected to the network have not benefitted much from its construction. By contrast, removal of the Hukou restrictions, which Chinese policy makers are considering, would result in much more widespread welfare gains, allowing everyone to gain by moving to where he or she is most productive. Removal of the Hukou restrictions would also promote urbanization in currently lagging (inland) regions, mostly by stimulating rural to urban migration.en-USCC BY 3.0 IGOLIVING STANDARDSTRANSPORT SECTORCITY TRANSPORTPOPULATION DISTRIBUTIONECONOMIC GROWTHURBANIZATIONBIG CITIESRAIL NETWORKFLOW OF MIGRANTSTRANSPORT INFRASTRUCTURETRANSPORTATION COSTSLOCAL GOVERNMENTSINFRASTRUCTURE DEVELOPMENTPUBLIC SERVICESHEALTH CARERURAL TRANSPORTPOLICY DISCUSSIONSREDUCTION IN TRAVELDEVELOPMENT POLICIESRAILWAY LINESHIGHWAY SYSTEMPUBLICATIONSRURAL POPULATIONCHANGE IN POPULATIONAIRPOPULATION SIZETRANSPORTATION INFRASTRUCTUREDRIVERSSPEEDSKNOWLEDGEDEVELOPMENTURBAN MIGRATIONTRANSPORT INVESTMENTSROADCHINESE POPULATIONCOSTSROAD NETWORKEQUAL RIGHTSPOTENTIAL MIGRANTSTRANSPORTPOPULATION GROWTHINTERSTATE HIGHWAY SYSTEMINCOME INEQUALITYMOBILITYAIR CONDITIONINGRING ROADSINDUSTRIALIZATIONCITIZENMIGRATIONPOLLUTIONSERVICE PROVISIONCULTURAL CHANGETRAVEL TIMESSERVICE DELIVERYMIGRANTSNATURAL RESOURCESSOCIAL DEVELOPMENTROUTEURBAN DWELLERSINFRASTRUCTURELAND USERESPECTPROGRESSINFRASTRUCTURE INVESTMENTHIGHWAY CONSTRUCTIONMIGRATION FLOWSUNEMPLOYMENTHUMAN CAPITALCONGESTIONDRIVINGMIGRANTTRAVELTRANSPORTATIONPOLICIESINTERNATIONAL TRADEPOPULATION CHANGESPOLICY RESEARCH WORKING PAPERCONGESTION COSTSPOLICY MAKERSELASTICITIESCHANGES IN POPULATION SIZELARGE CITIESTRAINSACCESSIBILITYPOPULATION DENSITYURBAN AREASHIGH SPEED RAIL NETWORKPOPULATIONSHIGHWAY NETWORKRAILWAYHIGHWAYSURBAN DEVELOPMENTPOLICYCITIZENSROADSMIGRATION POLICIESSOCIAL CONSEQUENCESRURAL RESIDENTSHIGHWAYMINORITYECONOMIC OPPORTUNITIESRESIDENCE STATUSNATURAL GASRAILWAYSPOPULATION MOVEMENTSECONOMIES OF SCALERESOLUTIONINVESTMENTSPATIAL DISTRIBUTIONRURAL AREASHIGH SPEED RAILRAILINTERNAL MIGRATIONMIGRATION STATISTICSPOPULATIONINVESTMENTSPOLICY RESEARCHURBAN POPULATIONSECONOMIC GEOGRAPHYTRANSPORT COSTSREMITTANCESPUBLIC SERVICETRAVEL TIMEURBAN POPULATIONPOPULATION INCREASESHEALTH SERVICESAVERAGE TRAVEL TIMEEXPRESSWAYSDEVELOPMENT POLICYWorking PaperWorld Bank10.1596/1813-9450-7350