This paper analyzes the worker mobility across jobs in a model of dynamic choice of immigration and job search. We estimate a system of equations in which immigration, work, and job change decisions are jointly determined with the wage. Using a unique survey of the Chinese youth, our estimation results deliver the following major findings. 1) The youth born in rural areas and non industrialized provinces remain at disadvantage in terms of the earnings potential. Conditional on working, our best estimate suggest that expected earnings is rougly 30% less if you are born in non rural areas in non industrialized provinces. 2) The large rural-urban gap in the labor market opportunities induce rural born school graduates to immigrate. The disadvantage of being immigrant is estimated to be roughly 10% of the earnings. 3) The immigrant disadvantage is compensated by their job mobility. After four jobs, the expected earnings differentials substantially narrow down among males, and it actually over take those born in urban areas among females. 4) Migration and job mobility are highly selective processes. OLS estimates ignoring the endogeneity of migration and job mobility over-estimate the effect of job mobility by the order of 50%. 5) Our estimation results suggest strongly that the cost of immigration has been reduced substantially in recent years, reflecting perhaps the (partial) relaxations of various regulations against migrant workers and their families. Nevertheless, the gap between the rural and urban areas persist and continue to be significant.
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