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Wages and Access to International Markets: Evidence from Urban China

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  • He, Xiaobo

Abstract

Using China Household Income Project Survey (2002) data, this paper addresses the causal relationship between individual wages and access to international markets. The ordinary least squares estimates show statistically insignificant and quantitatively zero effects of accessibility to international markets proxied by the length of contemporary transport routes connecting the origin city and its nearest major seaport. However, using prefecture-level population density in 1820 as exogenous variation in current transport routes, the two-stage least squares regressions provide an opposite picture indicating that every 1 percent increase in distance from the origin city to international markets (i.e. the nearest seaport), ceteris paribus, has a negative impact on individual wages of 0.086 percent. This causal effect remains robust to various sensitivity tests which include current labor market structure, historical factor endowments and initial population development.

Suggested Citation

  • He, Xiaobo, 2013. "Wages and Access to International Markets: Evidence from Urban China," MPRA Paper 44537, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:44537
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    References listed on IDEAS

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    More about this item

    Keywords

    O12; O15; F16;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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