A TALE OF TWO POLICIES: THE DISTRIBUTIONAL IMPACTS OF MIGRATION AND LAND POLICY IN CHINA

In this paper, we study the distributional impacts of regional land and migration policies on housing, land markets and resource re-allocation in the context of the Chinese economy. The distribution of both housing prices and population is endogenously determined in a general equilibrium framework. We calibrate the model into the Chinese economy during 2010-2015 to match certain key moments regarding migration flow and land supply policies among 278 prefectural cities. Counterfactual exercises suggest that a uniformly tightened land policy distracts population from flowing into large to median-size cities; hence, housing price growth slows down in large cities. A uniformly tightened migration policy leads to more population recipient cities at an overall smaller scale, which causes housing prices to grow in most cities. Housing and population distribution become less dispersed under both exercises. If land supply distribution becomes less dispersed, housing and land prices become lower in most cities, and land price distribution becomes more even.