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Technological progress bias, wage income gap, and income equity

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  • Bai, Zhe
  • Wang, Xingdong

Abstract

The wage income gap impacts China's income equity. This paper analyzes technological progress bias and regional wage income disparity trends via theoretical and evolutionary mechanism analysis. It finds that technological progress direction can explain changes in skill premiums and regional wage gaps. Since reform and opening-up, China's technological progress was generally capital-biased, but developed regions now show a labor-biased trend. This explains the initial widening and later narrowing of wage disparities. Boosting independent innovation and guiding technological progress towards labor can reduce wage gaps and achieve income equity. The study offers insights into skill premiums, wage distribution, and income equity.

Suggested Citation

  • Bai, Zhe & Wang, Xingdong, 2025. "Technological progress bias, wage income gap, and income equity," Finance Research Letters, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325007305
    DOI: 10.1016/j.frl.2025.107471
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    References listed on IDEAS

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