Technological progress bias, wage income gap, and income equity

Zhe Bai and Xingdong Wang

Finance Research Letters, 2025, vol. 81, issue C

Abstract: The wage income gap impacts China's income equity. This paper analyzes technological progress bias and regional wage income disparity trends via theoretical and evolutionary mechanism analysis. It finds that technological progress direction can explain changes in skill premiums and regional wage gaps. Since reform and opening-up, China's technological progress was generally capital-biased, but developed regions now show a labor-biased trend. This explains the initial widening and later narrowing of wage disparities. Boosting independent innovation and guiding technological progress towards labor can reduce wage gaps and achieve income equity. The study offers insights into skill premiums, wage distribution, and income equity.

Keywords: Technological progress bias; Skill premium; Wage income gap; Income equity (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325007305

DOI: 10.1016/j.frl.2025.107471

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