Automation and inequality in China

Yixiao Zhou and Rodney Tyers

China Economic Review, 2019, vol. 58, issue C

Abstract: In transitional economies, low wages imply sub-OECD yet growing labor shares of value added. China's rapid development has, however, seen a declining low-skill labor share and rising inequality. Here, a stylized model with three households and separable TFP and factor bias suggests a third of the decline in the low-skill share since 1994 is due to structural change and the rest mainly to skill-biased technical change. Expected future twists away from low-skill labor toward capital yield further inequality, moderated if strong TFP growth and population stability continue. But if the bias accompanies TFP shortfalls, worker displacement and rising inequality are in prospect.

Keywords: Automation; Income distribution; Tax; Transfers; General equilibrium; China (search for similar items in EconPapers)
JEL-codes: D33 D58 O33 O53 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Working Paper: Automation and inequality in China (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:58:y:2019:i:c:s1043951x18300981

DOI: 10.1016/j.chieco.2018.07.008

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