Abstract:Since last year, several cities in China have rolled policies for attracting talented people, with the hope to promote their economic development and upgrading. The key feature of this talent war can be depicted as government-guided, which means the government has adopted some non-market measures to allocate resources such as Hukou and government subsidy. However, these non-market measures will distort the price of factors, weaken the signal effect of the price and count against the optimal allocation of resources. The government should focus on providing public services and promoting its basic equalization across regions to set up good institutions for unified factor markets and the free mobility of factors. In the meantime, it should also play a leading role in facilitating the development of the talent market-based intermediaries and human resources service sector by bringing employers' role into full play in attracting, hunting, hiring, and retaining talent.
