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Wages and Access to International Markets: Evidence from Urban China

Xiaobo He ()

MPRA Paper from University Library of Munich, Germany

Abstract: Using China Household Income Project Survey (2002) data, this paper addresses the causal relationship between individual wages and access to international markets. The ordinary least squares estimates show statistically insignificant and quantitatively zero effects of accessibility to international markets proxied by the length of contemporary transport routes connecting the origin city and its nearest major seaport. However, using prefecture-level population density in 1820 as exogenous variation in current transport routes, the two-stage least squares regressions provide an opposite picture indicating that every 1 percent increase in distance from the origin city to international markets (i.e. the nearest seaport), ceteris paribus, has a negative impact on individual wages of 0.086 percent. This causal effect remains robust to various sensitivity tests which include current labor market structure, historical factor endowments and initial population development.

Keywords: O12; O15; F16 (search for similar items in EconPapers)
JEL-codes: F16 O12 O15 (search for similar items in EconPapers)
Date: 2013-02-23
New Economics Papers: this item is included in nep-dev, nep-lab, nep-lma, nep-tra and nep-tre
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