New publication in the Journal of International Economics

The paper “Skill-Biased Imports, Skill Acquisition, and Migration” by Jingting Fan and Lei Li has been published in the Journal of International Economics, Volume 157, September 2025.

Imported capital goods embody skill-complementary technologies and can therefore affect the supply of skills in developing countries. Focusing on China and using a shift-share design, the authors show that city-level growth in capital goods imports increases the local share of skilled workers, with both skill acquisition and migration contributing to this response.

The paper develops and quantifies a spatial equilibrium model incorporating these two mechanisms. The model is used to examine the aggregate effects of capital goods imports while accounting for trade and migration linkages across Chinese cities.

Counterfactual experiments suggest that the growth in capital goods imports in China between 2000 and 2010 increased the stock of college graduates by between 3.1 and 7.3 million. This corresponds to approximately 4.4% to 10.4% of the total increase in the number of college graduates over the same period.

The increase was disproportionately concentrated in coastal regions. The authors also find that these endogenous skill-supply responses reduce by about half the increase in the aggregate skill premium generated by capital goods imports.

Publication

Jingting Fan and Lei Li

“Skill-Biased Imports, Skill Acquisition, and Migration”

Journal of International Economics, Volume 157, September 2025, Article 104128

Keywords:
Imported capital goods, capital-skill complementarity, skill acquisition, migration

JEL Classification:
F14, F16, F66, J24, J61

Further information:

The full article is available at
.

For further information, please visit the external ScienceDirect.