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Trade Liberalization And Labor Shares In China

Author

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  • Fariha Kamal
  • Mary E. Lovely
  • Devashish Mitra

Abstract

We estimate the extent to which firms responded to tariff reductions associated with China’s WTO entry by altering labor’s share of value. Firm-level regressions indicate that firms in industries subject to tariff cuts raised labor’s share relative to economy-wide trends, both through input choices and rent sharing. Labor’s share of value is an estimated 12 percent higher in 2007 than it would be if tariffs had remained at their 1998 levels. There is significant variation across firms: the impact is larger where market access is better and it is influenced by union presence and state ownership.

Suggested Citation

  • Fariha Kamal & Mary E. Lovely & Devashish Mitra, 2014. "Trade Liberalization And Labor Shares In China," Working Papers 14-24, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:14-24
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    File URL: https://www2.census.gov/ces/wp/2014/CES-WP-14-24.pdf
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    References listed on IDEAS

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    Cited by:

    1. Lawrence Robert Z., 2015. "Recent Declines in Labor's Share in U.S. Income: A Preliminary Neoclassical Account," Working Paper Series rwp15-034, Harvard University, John F. Kennedy School of Government.
    2. Turgut Ozkan & Gozde Yanginlar & Salih Kalayci, 2016. "Railway Transport Liberalization: A Case Study of Various Countries in the World," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 6(4), pages 140-148, December.
    3. Robert Z. Lawrence, 2015. "Recent Declines in Labor's Share in US Income: A Preliminary Neoclassical Account," Working Paper Series WP15-10, Peterson Institute for International Economics.
    4. Benjamin Bridgman, 2014. "Is Labor's Loss Capital's Gain? Gross versus Net Labor Shares," BEA Working Papers 0114, Bureau of Economic Analysis.

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