This study empirically examines how land finance in destination and origin cities affects willingness to engage in labor mobility and explores the underlying mechanisms. Using a two-way fixed effects model, we match macro data from 287 prefecture-level cities in China from 2000 to 2020 with data from the 2018 China Migrant Dynamic Survey (CMDS). The results are as follows: First, land finance in destination cities inhibits labor mobility willingness, while land finance in origin cities and labor mobility willingness have a U-shaped relationship, decreasing initially and then increasing. Second, local governments’ dependence on land finance increases local housing prices and suppresses investment in non-economic public goods in the administrative area, thereby inhibiting labor mobility willingness; however, this also increases investment in economic public goods, attracting labor mobility willingness. Third, labor force age weakens the impact of land finance in origin cities on labor mobility willingness; however, age does not affect the impact of land finance in destination cities on labor mobility willingness. Fourth, land finance increases laborers’ willingness to settle.
Jin et al. (Sun,) studied this question.