Skills and the city in China

Abstract

This paper examines the spatial distribution and urban wage premiums of skills in China using both population censuses and labor surveys. We document an increasing concentration and urban wage premiums of occupations requiring more cognitive tasks. In large cities, the quality of cognitive skill matching between workers and occupations is significantly enhanced. Additionally, we observe stronger learning effects for workers with higher cognitive skills in these cities. However, we do not detect an urban premium for workers with higher social skills. Instead, the returns to individual social skills are more pronounced in cities with weaker institutional environments.