Bosker, M., Brakman, S., Garretsen, J. and Schramm, M. (2012). Relaxing Hukou: increased labor mobility and China's economic geography Journal of Urban Economics, 72:252--266.

China{\textquoteright}s Hukou system poses severe restrictions on labor mobility. This paper assesses the possible consequences of relaxing these restrictions for China{\textquoteright}s internal economic geography. We base our analysis on a new economic geography (NEG) model. First, we estimate the important model parameters using data on 264 of China{\textquoteright}s prefecture cities. Second, we use these estimates as inputs in a simulation of the full NEG model under different labor mobility regimes. We find that increased labor mobility leads to more pronounced core{\textendash}periphery outcomes. Beijing, Shanghai, Guangzhou and Chongqing in particular will further strengthen their dominant place in China{\textquoteright}s urban hierarchy. In addition, two other groups of cities can be distinguished: those in China{\textquoteright}s populous heartland offering preferential access to China{\textquoteright}s enormous internal market, and more peripheral cities that are better shielded from competition with China{\textquoteright}s economic heartland by virtue of their relative remoteness.