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Measured skill premia and input trade liberalization: Evidence from Chinese firms

Bo Chen, Miaojie Yu and Zhihao Yu ()

Journal of International Economics, 2017, vol. 109, issue C, 31-42

Abstract: Using Chinese firm-level production data, this paper developed a Mincer (1974)-type approach to investigate the impact of input trade liberalization on firms' wage inequality between skilled and unskilled workers (or skill premium). When controlling for product-market tariffs in a firm's industry, we find robust evidence that reduced input tariffs in a firm's industry are associated with a higher skill premium at firms with more skilled workforces. This effect is more pronounced at ordinary (non-processing) firms. We also provide evidence that reduced input tariffs in a firm's industry are associated with higher value added and profits at firms with more skilled workforces.

Keywords: Skill premium; Input trade liberalization; Firm evidence (search for similar items in EconPapers)
JEL-codes: F10 F12 F14 (search for similar items in EconPapers)
Date: 2017
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