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Export destination and the skill premium: Evidence from Chinese manufacturing industries

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  • Feicheng Wang
  • Chris Milner
  • Juliane Scheffel

Abstract

This paper examines the relationship between average income of export destinations and the skill premium using data of Chinese manufacturing industries from 1995 to 2008. To do so, we construct weighted average GDP per capita across destinations employing within‐industry export share to each destination as weights, and then link it with industry‐level wages and the skill premium. We find that industries that export more to high‐income destinations tend to pay a higher skill premium, suggesting that, on average, skilled workers benefit more from high‐income exports than unskilled workers. Our IV estimates confirm a causal relationship, and the results are robust to various specifications. Further results based on firm‐level data show consistent evidence. Our paper highlights the role of high‐income destination exports in shaping the uneven distributional effects of globalization for different types of workers. Destination d'exportation et prime de compétence : l'exemple des industries manufacturières chinoises. Grâce à des données d'entreprises manufacturières chinoises recueillies entre 1995 et 2008, nous analysons le rapport entre le revenu moyen des destinations d'exportation et la prime de compétence. À cette fin, nous déterminons le PIB moyen pondéré par habitant en utilisant la part des exportations vers chaque destination comme valeur pondérale pour chaque industrie, puis le corrélons aux salaires du secteur et à la prime de compétence de la main d'œuvre. Nous constatons que les industries exportant davantage vers des destinations à revenu élevé tendent à payer une prime de compétence plus importante. De tels résultats suggèrent qu'en moyenne, les travailleurs qualifiés bénéficient davantage des exportations vers les pays à haut revenu que les travailleurs non qualifiés. Nos estimations à variables instrumentales confirment cette relation de cause à effet, et les résultats sont robustes à différentes spécifications. Des résultats additionnels, fondés sur des données d'entreprises, sont autant de preuves concluantes. Notre article souligne l'importance des destinations d'exportation à haut revenu quant à la dynamique des effets distributifs inégaux de la mondialisation pour différents types de travailleurs.

Suggested Citation

  • Feicheng Wang & Chris Milner & Juliane Scheffel, 2022. "Export destination and the skill premium: Evidence from Chinese manufacturing industries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(2), pages 1057-1094, May.
    • Handle: RePEc:wly:canjec:v:55:y:2022:i:2:p:1057-1094
    DOI: 10.1111/caje.12587
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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