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How are wages set in Beijing

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  • José De Sousa

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

  • Sandra Poncet

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

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

Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00633752.

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Date of creation: 2011
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Publication status: Published, Regional Science and Urban Economics, 2011, 41, 1, 9-19
Handle: RePEc:hal:cesptp:hal-00633752

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Keywords: Wages; China; Migration; Economic geography;

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Cited by:
  1. Bosker, Maarten & Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2012. "Relaxing Hukou: Increased labor mobility and China’s economic geography," Journal of Urban Economics, Elsevier, vol. 72(2), pages 252-266.
  2. Carsten A Holz & Aaron Mehrotra, 2013. "Wage and price dynamics in a large emerging economy: The case of China," BIS Working Papers 409, Bank for International Settlements.
  3. Joachim Jarreau & Sandra Poncet, 2009. "Export Sophistication and Economic Performance: Evidence from Chinese Provinces," Working Papers, CEPII research center 2009-34, CEPII research center.
  4. Cletus C. Coughlin & Dennis Novy, 2013. "Is the International Border Effect Larger than the Domestic Border Effect? Evidence from US Trade," CESifo Economic Studies, CESifo, CESifo, vol. 59(2), pages 249-276, June.
  5. Deng, Ziliang & Guo, Honglin & Zhang, Weifu & Wang, Chengqi, 2014. "Innovation and survival of exporters: A contingency perspective," International Business Review, Elsevier, Elsevier, vol. 23(2), pages 396-406.
  6. Laura Hering & Sandra Poncet, 2010. "Income per capita inequality in China: The Role of Economic Geography and Spatial Interactions," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers), HAL hal-00633899, HAL.
  7. Laura Hering & Sandra Poncet, 2008. "The Impact of Economic Geography on Wages: Disentangling the Channels of Influence," Working Papers, CEPII research center 2008-20, CEPII research center.
  8. Fally, Thibault & Paillacar, Rodrigo & Terra, Cristina, 2010. "Economic geography and wages in Brazil: Evidence from micro-data," Journal of Development Economics, Elsevier, Elsevier, vol. 91(1), pages 155-168, January.
  9. Laura Hering & Sandra Poncet, 2007. "Economic Geography, Spatial Dependence and Income Inequality in China," Working Papers, CEPII research center 2007-22, CEPII research center.

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