Understanding the international mobility of Chinese temporary workers

Using unique panel data on the temporary movement of Chinese workers to 191 economies during 1992-2015, I investigate the patterns and determinants of labour mobility in the services trade. I estimate a gravity model of labour mobility in two categories, namely overseas labour services and overseas contracted projects. I find that distance (proxy for migration costs) and income are not the most important determinants of the latter. For overseas contracted projects, the dispatch of workers is not driven by their pure economic aims but by the Chinese government's policies and strategies such as its overseas project promotion policy. Furthermore, I employ the difference-in-differences estimation method to investigate the impact of this policy upon labour mobility. The results show that the policy of promoting overseas contracted projects has causal and positive effects on labour mobility in construction-related sectors.