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Are workers close to cities paid higher non-agricultural wages in rural China?

  • Chloé Duvivier

    (CERDI - Centre d'études et de recherches sur le developpement international - CNRS - Université d'Auvergne - Clermont-Ferrand I)

  • Mary-Françoise Renard

    (CERDI - Centre d'études et de recherches sur le developpement international - CNRS - Université d'Auvergne - Clermont-Ferrand I)

  • Shi Li

    (School of Economics and Business Administration - School of Economics and Business Administration - Beijing Normal University)

In the present study, we investigate whether workers close to cities are paid higher non-agricultural wages than workers in outlying rural areas. We find that workers close to urban areas not only benefit from more opportunities to engage in non-agricultural activities, but also from better paid jobs. In addition, distance exhibits a strongly nonlinear impact. Distance always has a negative impact on wages but the effect is more detrimental, the closer the village is to the urban center. We also find evidence of urban hierarchy effects: workers living close to bigger cities are paid higher wages. Finally, we provide evidence on the transmission channels at work.

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Date of creation: 24 Feb 2012
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Handle: RePEc:hal:wpaper:halshs-00673698
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