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<p>Labor allocation in China is significantly shaped by governments’ imitative economic interventions. This study investigates how place-based policies, particularly development zones in China, shape the spatial allocation of labor amid intense interjurisdictional competition and policy diffusion among local governments. Using city-level data for China from 2000 to 2015, we find the establishment of development zones enhances labor agglomeration. This effect is driven by "voting with feet", as workers gravitate toward better economic opportunities, and is further reinforced by horizontal policy imitation and vertical performance pressure among local governments. Further analysis shows that the resulting labor agglomeration in certain industries generates agglomeration externalities, including wage premiums, human capital enhancements, and productivity gains. These findings shed light on the role of place-based policies in shaping labor markets in transitional economies and contribute to the debates on state-led growth, policy diffusion, and local developmentalism.</p>

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Place-Based Policies Diffusion: Development Zones and Labor Distribution in China

  • 期刊论文

  • 发表日期：

    2026年7月28日

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  • Yangyang Jie,
  • Peikang Zhang

摘要

Labor allocation in China is significantly shaped by governments’ imitative economic interventions. This study investigates how place-based policies, particularly development zones in China, shape the spatial allocation of labor amid intense interjurisdictional competition and policy diffusion among local governments. Using city-level data for China from 2000 to 2015, we find the establishment of development zones enhances labor agglomeration. This effect is driven by "voting with feet", as workers gravitate toward better economic opportunities, and is further reinforced by horizontal policy imitation and vertical performance pressure among local governments. Further analysis shows that the resulting labor agglomeration in certain industries generates agglomeration externalities, including wage premiums, human capital enhancements, and productivity gains. These findings shed light on the role of place-based policies in shaping labor markets in transitional economies and contribute to the debates on state-led growth, policy diffusion, and local developmentalism.