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Globalization and wage inequality: Evidence from urban China

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  • Han, Jun
  • Liu, Runjuan
  • Zhang, Junsen

Abstract

This paper examines the impact of globalization on wage inequality using Chinese Urban Household Survey data from 1988 to 2008. Exploring two trade liberalization shocks, Deng Xiaoping's Southern Tour in 1992 and China's accession to the World Trade Organization (WTO) in 2001, we analyze whether regions more exposed to globalization experienced larger changes in wage inequality than less-exposed regions. Contrary to the predictions of the Heckscher–Ohlin model, we find that the WTO accession was significantly associated with rising wage inequality. We further show that both trade liberalizations contributed to within-region inequality by raising the returns to education (the returns to high school after 1992 and the returns to college after 2001).

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 87 (2012)
Issue (Month): 2 ()
Pages: 288-297

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Handle: RePEc:eee:inecon:v:87:y:2012:i:2:p:288-297

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Web page: http://www.elsevier.com/locate/inca/505552

Related research

Keywords: Wage inequality; Skill premium; Globalization; China;

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Citations

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Cited by:
  1. Federico Mandelman, 2013. "Labor Market Polarization and International Macroeconomic Dynamics," 2013 Meeting Papers 291, Society for Economic Dynamics.
  2. Theresa M. Greaney & Yao Li, 2013. "Trade, Foreign Direct Investment and Wage Inequality in China: A Heterogeneous Firms Approach," Working Papers 201306, University of Hawaii at Manoa, Department of Economics.
  3. Han, Jun & Liu, Runjuan & Ural Marchand, Beyza & Zhang, Junsen, 2013. "Market Structure, Imperfect Tariff Pass-Through, and Household Welfare in Urban China," Working Papers 2013-11, University of Alberta, Department of Economics, revised 01 Jul 2014.

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