Upstreamness, exports, and wage inequality: Evidence from Chinese manufacturing data

Bo Chen

Journal of Asian Economics, 2017, vol. 48, issue C, 66-74

Abstract: In this paper we investigate within-firm wage inequality across heterogeneous industries that hold different positions in the domestic value chain, and across heterogeneous firms that have different exposure to trade. We find that the wage inequality problem is more severe in upstream industries than in downstream ones, and among firms with greater exposure to trade (i.e., larger export share of sales). Our findings support both classic and new new trade theories on wage inequality. In downstream industries where Chinese firms are typically engaged in processing and assembly work with intensive use of unskilled labor, trade leads to less wage inequality within firms. However, trade also introduces pro-competitive effects which usually benefit exporters and their skilled labor. The results hold after various checks and controls for robustness.

Keywords: Wage inequality; Upstreamness; Exports (search for similar items in EconPapers)
JEL-codes: F13 F14 F62 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:48:y:2017:i:c:p:66-74

DOI: 10.1016/j.asieco.2016.11.003

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