Urban Compactness and Internal Migrant Employment: Evidence from Job Supply and Accessibility in Chinese Cities

Source abstract

This paper examines whether a more compact urban spatial structure improves internal migrants’ employment outcomes and through which channels. We develop a search-and-matching framework in which compactness increases migrants’ effective matching intensity by strengthening local job creation (job-supply channel) and reducing commuting and information frictions (job-accessibility channel). Empirically, we construct a novel city–year compactness index from nighttime light imagery and match it to individual data from the China Migrants Dynamic Survey (2012–2018). Exploiting China’s 2014 hukou reform as a quasi-natural experiment, we estimate difference-in-differences models with city and year fixed effects. The heterogeneous-exposure difference-in-differences estimates show that cities with lower baseline compactness experienced larger post-2014 improvements in migrants’ employment outcomes than cities with higher baseline compactness, while the event-study estimates reveal no statistically significant differential pre-trends. Separate fixed-effects estimates using the annual compactness index also show a positive relationship between urban compactness and migrants’ employment and job stability. Heterogeneity analyses indicate larger effects for high-educated migrants, within-province migrants (proxying stronger social ties and connectivity), and migrants in more inclusive cities measured by policy-text scoring. Mechanism tests suggest that compactness is associated with greater job creation (new firm registrations and employment growth) and improved accessibility (denser transport provision and better internet-based information access). This paper contributes by translating classic urban agglomeration insights into a micro-level mechanism linking urban form to migrant employment through job arrival and offer-acceptance processes. While the empirical setting is China, the underlying mechanisms are relevant to rapidly urbanizing developing countries with large internal migrant populations.