Abstract:In order to understand the relationship between trade opening and regional labor market reconstruction from the perspective of dual circulation, and based on the open multi-regional spatial general equilibrium model, this paper takes China's accession into WTO as a quasi-natural experiment of trade opening shocks, and uses the difference-in-difference-in-difference estimation to investigate the heterogeneity of international demand shocks resulting from trade opening on wage and employment adjustment in labor markets of different size's cities. The results show that the above mentioned shocks has significantly promoted urban wage and employment growth, and that facing the shocks, large cities, due to their comparatively less labor supply elasticity, tend to have larger wage and smaller employment responses than small cities do. In the context of shrinking international demand, small cities need to pay more attention to integration into domestic market than big cities do, to reduce the risks of labor unemployment.