IDEAS home Printed from https://ideas.repec.org/p/unu/wpaper/dp2003-61.html

International Trade, Location and Wage Inequality in China

Author

Listed:
  • Songhua Lin

Abstract

Models of economic geography predict that transportation costs directly affect demand for goods and the supply of intermediate inputs. One of the reasons that international trade is concentrated in the coastal provinces of China is that they have lower transportation costs in transporting goods to other countries than do provinces in the interior. This paper examines the relationship between the provincial wage rate and each province's access to international markets, and to suppliers of intermediate inputs.

Suggested Citation

  • Songhua Lin, 2003. "International Trade, Location and Wage Inequality in China," WIDER Working Paper Series DP2003-61, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:dp2003-61
    as

    Download full text from publisher

    File URL: https://www.wider.unu.edu/sites/default/files/dp2003-061.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
    2. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness," CEPR Discussion Papers 2887, C.E.P.R. Discussion Papers.
    3. Murphy, Kevin M & Welch, Finis, 1993. "Inequality and Relative Wages," American Economic Review, American Economic Association, vol. 83(2), pages 104-109, May.
    4. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 857-880.
    5. Moreno, Ramon & Trehan, Bharat, 1997. "Location and the Growth of Nations," Journal of Economic Growth, Springer, vol. 2(4), pages 399-418, December.
    6. repec:fth:iniesr:430 is not listed on IDEAS
    7. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, vol. 62(1), pages 53-82, January.
    8. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555, Elsevier.
    9. Hanson, G.H. & Harrison, A., 1995. "Trade, Technology and Wage Inequality," Papers 95-20, Columbia - Graduate School of Business.
    10. Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996. "Trends in regional inequality in China," China Economic Review, Elsevier, vol. 7(1), pages 1-21.
    11. Robert C. Feenstra & Wen Hai & Wing T. Woo & Shunli Yao, "undated". "The U.S.-China Bilateral Trade Balance: It'S Size And Determinants," Department of Economics 98-09, California Davis - Department of Economics.
    12. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 367-397.
    13. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
    14. Edward E. Leamer, 1994. "Trade, Wages and Revolving Door Ideas," NBER Working Papers 4716, National Bureau of Economic Research, Inc.
    15. Khan, Azizur Rahman & Griffin, Keith & Riskin, Carl & Renwei, Zhao, 1993. "Sources of income inequality in post-reform China," China Economic Review, Elsevier, vol. 4(1), pages 19-35.
    16. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    17. Richard B. Freeman, 1994. "Working Under Different Rules," NBER Books, National Bureau of Economic Research, Inc, number free94-1, January.
    18. Robert Z. Lawrence & Matthew J. Slaughter, 1993. "International Trade and American Wages in the 1980s: Giant Sucking Sound or Small Hiccup?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2 Microec), pages 161-226.
    19. Hussain, Athar & Lanjouw, Peter & Stern, Nicholas, 1994. "Income inequalities in China: Evidence from household survey data," World Development, Elsevier, vol. 22(12), pages 1947-1957, December.
    20. George J. Borjas & Valerie A. Ramey, 1993. "Foreign Competition, Market Power and Wage Inequality: Theory and Evidence," NBER Working Papers 4556, National Bureau of Economic Research, Inc.
    21. Hanson, Gordon H, 1996. "Localization Economies, Vertical Organization, and Trade," American Economic Review, American Economic Association, vol. 86(5), pages 1266-1278, December.
    22. Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
    23. Cragg, Michael Ian & Epelbaum, Mario, 1996. "Why has wage dispersion grown in Mexico? Is it the incidence of reforms or the growing demand for skills?," Journal of Development Economics, Elsevier, vol. 51(1), pages 99-116, October.
    24. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pedro Amaral & Mauro Lemos & Rodrigo Simões & Flávia Chein, 2010. "Regional Imbalances and Market Potential in Brazil," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(4), pages 463-482.
    2. Christian Dreger & Reinhold Kosfeld & Yanqun Zhang, 2019. "Determining Minimum Wages In China: Do Economic Factors Dominate?," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 31(1-2), pages 44-59, March.
    3. Song, Tao & Cieslik, Andrzej, 2020. "The effects of free trade agreements on regional wages in China," Economic Systems, Elsevier, vol. 44(3).
    4. Bosker, Maarten & Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2012. "Relaxing Hukou: Increased labor mobility and China’s economic geography," Journal of Urban Economics, Elsevier, vol. 72(2), pages 252-266.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
    2. Stephen J. Redding & Esteban Rossi-Hansberg, 2017. "Quantitative Spatial Economics," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 21-58, September.
    3. Jorge Saba Arbache, 2001. "Trade Liberalisation and Labor Markets in Developing Countries: Theory and Evidence," Studies in Economics 0112, School of Economics, University of Kent.
    4. Jeff Borland, 2000. "Economic Explanations of Earnings Distribution Trends in the International Literature and Application to New Zealand," Treasury Working Paper Series 00/16, New Zealand Treasury.
    5. Redding, Stephen & Schott, Peter K., 2003. "Distance, skill deepening and development: will peripheral countries ever get rich?," Journal of Development Economics, Elsevier, vol. 72(2), pages 515-541, December.
    6. Nahuis, R., 1997. "On Globalisation, Trade and Wages," Research Memorandum 747, Tilburg University, School of Economics and Management.
    7. Cardoso-Vargas, Carlos, 2015. "Potencial de mercado y desigualdad salarial, evidencia para México [Market potential and wage inequality, evidence for Mexico]," MPRA Paper 69696, University Library of Munich, Germany, revised 05 Nov 2015.
    8. Agnese, Pablo, 2009. "Japan and her dealings with offshoring: An empirical analysis with aggregate data," MPRA Paper 16505, University Library of Munich, Germany.
    9. Gordon H. Hanson, 2007. "Globalization, Labor Income, and Poverty in Mexico," NBER Chapters, in: Globalization and Poverty, pages 417-456, National Bureau of Economic Research, Inc.
    10. Robert C. Feenstra, 2017. "Statistics to Measure Offshoring and its Impact," NBER Working Papers 23067, National Bureau of Economic Research, Inc.
    11. Julio Martínez-Galarraga, 2014. "Market potential estimates in history: a survey of methods and an application to Spain, 1867-1930," Working Papers 0051, European Historical Economics Society (EHES).
    12. Venables, Anthony & Redding, Stephen & Overman, Henry, 2001. "The Economic Geography of Trade Production and Income: A Survey of Empirics," CEPR Discussion Papers 2978, C.E.P.R. Discussion Papers.
    13. Cardoso-Vargas, Carlos, 2015. "Potencial de mercado y desigualdad salarial, evidencia para México [Market potential and wage inequality, evidence for Mexico]," MPRA Paper 68424, University Library of Munich, Germany, revised 05 Nov 2015.
    14. Andreas Eberhard-Ruiz & Alexander Moradi, 2018. "Regional Market Integration and City Growth in East Africa: Local but no Regional Effects?," CSAE Working Paper Series 2018-09, Centre for the Study of African Economies, University of Oxford.
    15. Kurokawa, Yoshinori, 2011. "Is a skill intensity reversal a mere theoretical curiosum? Evidence from the US and Mexico," Economics Letters, Elsevier, vol. 112(2), pages 151-154, August.
    16. Chiquiar, Daniel & Covarrubias, Enrique & Salcedo, Alejandrina, 2016. "Labor market consequences of trade openness and competition in foreign markets," Conference papers 332760, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    17. Stephen J. Redding, 2010. "The Empirics Of New Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 297-311, February.
    18. Redding, Stephen J., 2016. "Goods trade, factor mobility and welfare," Journal of International Economics, Elsevier, vol. 101(C), pages 148-167.
    19. Adsera, Alicia & Boix, Carles, 2000. "Must we choose? European unemployment, American inequality, and the impact of education and labor market institutions," European Journal of Political Economy, Elsevier, vol. 16(4), pages 611-638, November.
    20. Redding, Stephen, 2020. "Trade and Geography," CEPR Discussion Papers 15268, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:dp2003-61. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Siméon Rapin (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.