Using newly developed econometric techniques, Pedroni and Yao (2006)
show that China has been experiencing regional income divergence since the Reform
Period, and that traditional explanations explaining divergence are insufficient. This
paper considers the role of labor mobility in the context of endogenous growth with
positive externalities to human capital. Using provincial level data on income,
migration and population, non-stationary panel techniques are applied to test for
regional convergence conditional on migration rates.