City scale and productivity in China

- Effects of city scale on output per worker in China are examined.
- Existing studies use incomplete measures of city scale and may give wrong results.
- Statistical yearbook data miss many private sector workers so Census data used here.
- Four-fifths of cities are close to estimated productivity-maximizing scale.
- Output losses from sub-optimal scale are typically below 10%.

We examine effects of city scale on output per worker in China. Existing studies use wrong measures of scale. Four-fifths of cities are close to the estimated productivity-maximizing scale. Output losses from sub-optimal scale are typically below 10%.