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Skill-biased technological change and labor market polarization in China

Jun Wang, Yong Hu and Zhiming Zhang

Economic Modelling, 2021, vol. 100, issue C

Abstract: This paper analyzes the formation mechanism of polarization in China’s labor market from the perspective of skill-biased technological change (SBTC). Using the World Input–Output Database for 1995–2009 and China’s industry database for 2010–2016, this paper measures the SBTC of 33 industries in China and conducts empirical tests. Results show that SBTC significantly promotes growth in employment and wages among both high-skilled and low-skilled workers but has no significant impact on the employment and wages of medium-skilled workers. A further analysis by using quantile regression shows that SBTC inhibits employment and wage growth among medium-skilled workers to some extent. These results indicate that SBTC is a crucial source of employment and wage polarization and contributes to labor market polarization in China.

Keywords: Employment polarization; Labor market; Skill-biased technological change; Wage polarization (search for similar items in EconPapers)
JEL-codes: J01 J31 O33 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.econmod.2021.105507

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