High-Speed Rails and Rural-urban Migrants’ Wages

Abstract This study examines the causal effects of high-speed rails (HSRs) on the wages of rural–urban migrants. Although transportation infrastructure may reshape business activities, little attention is paid to its impacts on rural migrants’ welfare. In this study, we exploit difference-in-differences estimation to show the following. First, HSRs substantially decrease rural–urban migrants’ wages, especially for low-skilled migrants. Second, to establish causality, we introduce a placebo test and instrumental variable based on the hypothetical least-cost HSR networks, and the results remain. Third, a plausible mechanism is migration driven by HSRs. That is, HSRs facilitate the movement of low-skilled labors to connected cities, thus reshaping employment structures in the cities. Fourth, our findings are considerably pronounced for workers of non-state-owned enterprises, migrants seeking jobs via market method, and migrants working in high labor-intensive industry. Overall, we provide the empirical evaluation of the economic consequences of HSRs on migrants’ wages from the channel of migration.