China’s Skill-Biased Imports

Hongbin Li, Lei Li () and Hong Ma

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: China has witnessed rapid increases in the skill premium over the last few decades. In this paper, we study the short-run effect of capital goods imports on skill premium in China. The surge in capital goods imports, which embody advanced technology, can explain the rising demand for skills in China. We exploit regional variations in capital goods import exposure stemming from initial differences in import structure and instrument for the capital goods import growth using exchange rate movements. A city at the 75th percentile of the distribution of capital goods imports growth has a higher skill premium by 5 percentage points (0.38 standard deviation) over te one at the 25h percentile. To explore the underlying mechanism, we provide firm-level evidence and show that imported capital goods are skill-complementary

Keywords: imported capital goods; skill-biased technological change; skill premium (search for similar items in EconPapers)
JEL-codes: F16 J20 J31 O33 (search for similar items in EconPapers)
Pages: 44
Date: 2022-08
New Economics Papers: this item is included in nep-mic and nep-mst
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Related works:
Journal Article: China's skill-biased imports (2022)
Working Paper: China's Skill-Biased Imports (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2022_363

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