Building a unified national labor market serves as the institutional cornerstone for achieving coordinated regional economic development. At present, the spatial misallocation of labor resources remains a prominent issue in China, with the rational and orderly flow of labor between regions and between urban and rural areas still constrained. How to advance the construction of a unified national labor market in the context of high-quality development has thus become a critical task in the new development stage. Accurately identifying the economic effect of building a unified national labor market is an essential foundation for accelerating this process and promoting the development of a unified national market.

Based on the improved migration surplus model framework and microdata from the national population census and the population sampling survey, this paper quantitatively measures the incremental welfare brought by internal migrants to urban local workers and its correlation with the skill structure of internal migrants, and constructs a counterfactual analytical framework for removing migration restrictions to further explore the economic effect of building a national unified labor market. The results show that there is an objective urban migration surplus in China. The imperfect substitution between internal migrants and native workers and the patterns of skill complementarity constitute an intrinsic source of urban migration surplus. Moreover, the skill structure of migrants that maximized urban migration surplus was skewed towards higher-skilled groups in the early days, and shifted towards low-skilled groups after 2010. A unified national labor market helps promote the optimization of population spatial allocation and the enhancement of urban migration surplus. The economic effect during the sample period shows a trend of convergence with an increase of employment stability in the urban labor market and a decrease of “capital-labor” complementarity, as well as the continuous release with gradual elimination of internal migration restrictions and continued reshaping of urban scale distribution patterns.

The marginal contributions of this paper are as follows: First, by calculating the differences in migration surplus before and after the removal of restrictions, it identifies the economic effect of building a unified national labor market, providing a new analytical framework for policy evaluation of urban labor market reforms. Second, it incorporates land as an input into the production function of the urban sector, refining the migration surplus model framework. Furthermore, by constructing various scenarios with different capital supply elasticity and factor price elasticity, it multi-dimensionally measures the economic effect of building a unified national labor market.