Structural Transformation and the Urban Growth Shadow : County-Level Evidence from China, 1990–2020

How does an area’s proximity to big cities affect its growth? Using county-level data from China for 1990–2020, we find that an area’s being close to big cities (in the 150–250 km range) reduces the decadal population growth rate by 2.8–3.8 percentage points. Initial agricultural employment share has the strongest power to explain whether the negative effect exists. As the local agricultural employment share declines over time, being proximate to big cities becomes increasingly beneficial. The mechanism is consistent with lower opportunity costs of migration for people employed in agriculture, yet contrasts with core-periphery models that give transport cost a central role