Advanced Search
MyIDEAS: Login

Does deeper integration enhance spatial advantages? Market access and wage growth in China

Contents:

Author Info

  • Kamal, Fariha
  • Lovely, Mary E.
  • Ouyang, Puman

Abstract

New economic geography models predict that costly transport and the spatial distribution of demand affect the profits firms can earn in different locations, leading to higher wages for workers employed in cities with better geographic access to markets. In light of the dramatic embrace of globalization and labor market reforms that occurred in China after 1995, we measure the extent to which the influence of market access on wages strengthened and influenced wage growth over the subsequent period. Using survey data from two waves of the Chinese Household Income Project, we find that urban wages became more strongly influenced by access to markets, including domestic markets, between 1995 and 2002. The estimated elasticity of the wage with respect to market access of the worker's location more than doubles over the period. We also find that market access influences wages paid to both skilled and unskilled workers. Within provinces, we find no significant relationship between market access and either group's wages when adjusted for living costs, as expected in the context of internal labor migration. However, across provinces wages net of living costs are positively correlated with the market access of the worker's location. Consistent with deregulation of wage setting in state enterprises, the influence of market access on wages strengthened most for state-owned firms. A decomposition of the change in the mean wage indicates that market access is an economically important factor explaining the growth in average wages between 1995 and 2002.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S1059056011001195
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal International Review of Economics & Finance.

Volume (Year): 23 (2012)
Issue (Month): C ()
Pages: 59-74

as in new window
Handle: RePEc:eee:reveco:v:23:y:2012:i:c:p:59-74

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/620165

Related research

Keywords: Market access; Wages; New economic geography;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Pi, Jiancai & Zhou, Yu, 2014. "Foreign capital, public infrastructure, and wage inequality in developing countries," International Review of Economics & Finance, Elsevier, vol. 29(C), pages 195-207.
  2. Cong S. Pham & Mary E. Lovely & Devashish Mitra, 2009. "The Home-Market Effect and Bilateral Trade Patterns: A Reexamination of the Evidence," Economics Series 2009_12, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
  3. He, Xiaobo, 2013. "Wages and Access to International Markets: Evidence from Urban China," MPRA Paper 44537, University Library of Munich, Germany.
  4. Pi, Jiancai & Zhou, Yu & Yin, Jun, 2013. "International factor mobility, monopolistic competition, and wage inequality," Economic Modelling, Elsevier, vol. 33(C), pages 326-332.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:23:y:2012:i:c:p:59-74. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.