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Trade, technology, and China's rising skill demand

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  • Bin Xu
  • Wei Li

Abstract

China has experienced rising wage inequality due to rising relative demand for skilled labour. In this paper, we use a sample of 1,500 firms to investigate the impact of trade and technology on China's rising skill demand. We find that export expansion had a negative direct effect (Heckscher-Ohlin type) and a positive indirect effect (export-induced skill-biased technical change) on skill demand; the net effect was found positive and accounted for 5 percent of rising skill demand of the sample firms. We find that technical change in Chinese firms was on average skill-neutral, but majority foreign-owned firms experienced skill-biased technical progress that accounted for 22 percent of the rising skill demand of the sample firms. Copyright (c) 2008 The Authors Journal compilation (c) 2008 The European Bank for Reconstruction and Development .

Suggested Citation

  • Bin Xu & Wei Li, 2008. "Trade, technology, and China's rising skill demand," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(1), pages 59-84, January.
  • Handle: RePEc:bla:etrans:v:16:y:2008:i:1:p:59-84
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    References listed on IDEAS

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    Cited by:

    1. Fu, Dahai & Wu, Yanrui, 2013. "Export wage premium in China's manufacturing sector: A firm level analysis," China Economic Review, Elsevier, vol. 26(C), pages 182-196.
    2. repec:eee:wdevel:v:97:y:2017:i:c:p:313-329 is not listed on IDEAS
    3. LEE, Jong-Wha & Wie, Dainn, 2017. "Wage Structure and Gender Earnings Differentials in China and India," World Development, Elsevier, vol. 97(C), pages 313-329.
    4. Chen, Bo, 2017. "Upstreamness, exports, and wage inequality: Evidence from Chinese manufacturing data," Journal of Asian Economics, Elsevier, vol. 48(C), pages 66-74.
    5. repec:eee:chieco:v:46:y:2017:i:c:p:97-109 is not listed on IDEAS

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