Input Tariff Cuts and the Spatial Distribution of Skilled Labor: Evidence From China

Abstract

As China's economy advances toward high-quality development, how to promote the rational spatial distribution of skilled labor to achieve sustainable regional economic growth has become an urgent issue. This study utilizes microdata from the 2000–2015 Chinese census and tariff data from China covering the same period to empirically regress input tariff cuts on changes in the proportion of skilled labor in cities. The results show that for every 1% decrease in input tariffs, the proportion of skilled labor in cities increases by 0.78%, accounting for 15.22% of the spatial distribution of skilled labor. Mechanism analysis indicates that input tariff cuts facilitate technological progress and subsequently increase skilled labor demand. From an equilibrium perspective, increased skilled labor demand attracts skilled worker inflows, thereby increasing the proportion of skilled labor in cities. Additionally, input tariff cuts have a more significant impact on cities with low trade costs, a high historical proportion of skilled labor, and high labor market flexibility. These findings provide favorable evidence of the micro-level impact of input tariff cuts on regional skilled labor markets, offering important policy insights into how developing countries similar to China can optimize the spatial distribution of skilled labor through input tariffs.