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How are wages set in Beijing?

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  • de Sousa, José
  • Poncet, Sandra

Abstract

China's export performance over the past fifteen years has been phenomenal. Is this performance going to last? Wages are rising rapidly but a population in excess of one billion represents a large reservoir of labor. Firms in export-intensive provinces may draw on this reservoir to increase competition in their labor market and keep wages low for many years to come. We develop a wage equation from a New Economic Geography model to capture the upward pressure from national and international demand and downward pressure from migration. Using panel data at the province level, we find that migration has moderately slowed down Chinese wage increase over the period 1995-2007.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 41 (2011)
Issue (Month): 1 (January)
Pages: 9-19

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Handle: RePEc:eee:regeco:v:41:y:2011:i:1:p:9-19

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Keywords: Wages China Migration Economic geography;

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References

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Cited by:
  1. Thibault Fally & Rodrigo Paillacar & Cristina Terra, 2008. "Economic Geography and Wages in Brazil: Evidence from Micro-Data," THEMA Working Papers 2008-23, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  2. Cletus C. Coughlin & Dennis Novy, 2009. "Is the International Border Effect Larger than the Domestic Border Effect? Evidence from U.S. Trade," CESifo Working Paper Series 2853, CESifo Group Munich.
  3. Maarten Bosker & Steven Brakman & Harry Garretsen & Marc Schramm, 2010. "Relaxing Hukou - Increased Labor Mobility and China’s Economic Geography," CESifo Working Paper Series 3271, CESifo Group Munich.
  4. Laura Hering & Sandra Poncet, 2010. "Income Per Capita Inequality in China: The Role of Economic Geography and Spatial Interactions," The World Economy, Wiley Blackwell, vol. 33(5), pages 655-679, 05.
  5. Holz , Carsten A. & Mehrotra, Aaron, 2014. "Wage and price dynamics in a large emerging economy: The case of China," BOFIT Discussion Papers 3/2014, Bank of Finland, Institute for Economies in Transition.
  6. Deng, Ziliang & Guo, Honglin & Zhang, Weifu & Wang, Chengqi, 2014. "Innovation and survival of exporters: A contingency perspective," International Business Review, Elsevier, vol. 23(2), pages 396-406.
  7. repec:hal:cesptp:hal-00633816 is not listed on IDEAS
  8. Hering, Laura & Poncet, Sandra, 2009. "The impact of economic geography on wages: Disentangling the channels of influence," China Economic Review, Elsevier, vol. 20(1), pages 1-14, March.
  9. Laura Hering & Sandra Poncet, 2007. "Economic Geography, Spatial Dependence and Income Inequality in China," Working Papers 2007-22, CEPII research center.
  10. Joachim Jarreau & Sandra Poncet, 2009. "Export Sophistication and Economic Performance: Evidence from Chinese Provinces," Working Papers 2009-34, CEPII research center.

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