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Export destinations and skill premium: Evidence from chinese manufacturing industries

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  • Feicheng Wang
  • Chris Milner
  • Juliane Scheffel

Abstract

This paper examines the relationship between average income of export destinations and skill premium using data of Chinese manufacturing industries from 1995 to 2008. To do so, we construct weighted average GDP per capita across destinations employing within-industry export share to each destination as weight, and then link it with industry-level wages and skill premium. We find that industries that export more to high-income destinations tend to pay a higher skill premium, suggesting that on average, skilled workers benefit more from high-income exports than unskilled workers. Our IV estimates confirm a causal relationship and the results are robust to various specifications. Our paper contributes to the understanding of the influence of export destinations on the uneven distributional effects of globalisation for different types of workers.

Suggested Citation

  • Feicheng Wang & Chris Milner & Juliane Scheffel, 2019. "Export destinations and skill premium: Evidence from chinese manufacturing industries," Discussion Papers 2019-07, University of Nottingham, GEP.
    • Handle: RePEc:not:notgep:2019-07
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    Keywords

    Export destinations; Skill premium; Manufacturing industries; China JEL Classification: F14; F16; F66; J24; J31;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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