Li, Yao (2008): Industrial Agglomeration and Wage Inequality in China.
Download (260kB) | Preview
This paper estimates nonlinear structural wage equations derived from NEG model with data on 327 cities in China. The estimation results show that the variation of wage level across cities in China is associated with proximity to large markets. The estimated elasticity of substitution of China is smaller than those of the other countries studied in previous research. It indicates that with the same increase of sub-regional market size, China may suffer more serious regional inequality problems. My estimation shows that although increased agglomeration can increase each city’s wage level, it may also increase the wage gap between large and small cities.
|Item Type:||MPRA Paper|
|Original Title:||Industrial Agglomeration and Wage Inequality in China|
|English Title:||Industrial Agglomeration and Wage Inequality in China|
|Keywords:||New Economic Geography, Wage Inequality, Elasticity of Substitution|
|Subjects:||O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy; Factor Movement Policy; Foreign Exchange Policy
F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity
|Depositing User:||YAO LI|
|Date Deposited:||08. Nov 2008 15:06|
|Last Modified:||13. Feb 2013 10:15|
Anderson, Kym, Jikun Huang and Elena Ianchovichina. 2003. Long–Run Impacts of China’s WTO Accession on Farm-Nonfarm Income Inequality and Rural Poverty. World Bank Policy Research Paper No. 3052, Washington, D.C.: World Bank, 1-33.
Au, C. and Henderson, V., 2002. “How Migration Restrictions Limit Agglomeration and Productivity in China.” NBER Working Papers 8707, National Bureau of Economic Research, Inc.
Batisse, Cecile, and Sandra Poncet. 2004. “Protectionism and Industry Location in Chinese Provinces.” Journal of Chinese Economic and Business Studies, 2(2), 133-154.
Brakman, S., Garretsen H. and Schramm M., 2003. “The Spatial Distribution of Wages: Estimating the Helpman-Hanson model for Germany.” Working Papers 03-08, Utrecht School of Economics.
Brakman, S., Garretsen, H., Schramm M., Gorter J. and van der Horst, Albert, 2005. “New Economic Geography, Empirics, and Regional Policy.” CPB Special Publications 56, CPB Netherlands Bureau for Economic Policy Analysis.
Catin M. and Van Huffel C., 2003. “Inégalités spatiales et développement économique : le cas français (1850-2000).” Revue d’Economie Régionale et Urbaine, 5, 799-814.
Chen, Aimin, 1996. “China’s Urban Housing Reform: Price_ Rent Ratio and Market Equilibrium.” Urban Studies, 33, 1077-1092.
Deng, Xiaoping. 1994. Selected Works of Deng Xiaoping. V.3. page 111. Beijing: People′ s Publishing House (in Chinese).
Ethier, Wilfred J, 1982. “National and International Returns to Scale in the Modern Theory of International Trade.” American Economic Review, 72(3), 389-405.
Feenstra, R.C., 1994. “New product varieties and the measurement of international prices.” American Economic Review, 84, 157–177.
Fujita, M. and Thisse, J.F., 1996. “Economics of agglomeration.” Journal of the Japanese and International Economies, 10, 339-378.
Hanson, G., 2005. “Market Potential, Increasing Returns, and Geographic Concentration.” Journal of International Economics, 67(1), 1-24.
Head, K. and Ries, J., 2001. “Increasing Returns versus National Product Differentiation as an Explanation for The Pattern of US-Canada Trade.” American Economic Review, 91, 858-76.
Helpman, E., 1998. “The Size of Regions,” in: Pines, D., Sadka, E, Zilcha, I. (Eds.), Topics in Public Economics. Cambridge University Press, Cambridge, 33-54.
Huang, Ping and Zhan, Shaohua. 2005. “Internal Migration in China: Linking It to Development.” Paper presented at Regional Conference on Migration and Development in Asia, Lanzhou, China, 14-16.
International Monetary Fund. 2004. “China’s Emergence and Its Impact on the Global Economy.” World Economic Outlook (April).
International Monetary Fund. 2005. Direction of Trade Statistics. Washington, D.C.: IMF.
Jin, Jang C. 2004. “On the Relationship Between Openness and Growth in China: Evidence from Provincial Time Series Data.” World Economy, 27(10), 1571-1582.
Krugman, Paul. 1991. “Increasing Returns and Economic Geography.” Journal of Political Economy, 99(3), 483-99.
Li, Yao. 2008. “Capital Liberalization, Industrial Agglomeration and Wage Inequality,” MPRA Working paper.
Li, Si-ming and Yi, Zheng. 2007. “The Road to Homeownership under Market Transition: Beijing, 1980-2001.” Urban Studies, 42, 342-68.
National Bureau of Statistics of China (NBSC). 1990-2007. China Statistical Yearbook. Beijing: Statistical Publishing House.
National Bureau of Statistics of China (NBSC). 1990-2000. China City Statistical Yearbook. Beijing: Statistical Publishing House.
Rauch, J.E., 1993. “Productivity gains from geographic concentration of human capital: evidence from the cities.” Journal of Urban Economics, 34, 380-400.
Redding, Stephen and Venables, Anthony J., 2004. “Economic Geography and International Inequality.” Journal of International Economics, 62(1), 53-82
Roback, J., 1982. “Wages, rents, and the quality of life.” Journal of Political Economy, 90, 1257-78.
Theil, H. 1967. Economics and Information Theory. Chicago: Rand McNally and Company.
Tuan, C. and Ng, L. F. Y. 2001. “FDI Promotion Policy in China: Governance and Effectiveness.” The World Economy, 24(8), 1051-1074.
Tuan, C. and Ng, L. F. Y. 2003. “FDI Facilitated by Agglomeration Aconomies: Evidence from Manufacturing and Aervices Joint Ventures in China.” Journal of Asian Economics, 13(6), 749-765.
Tuan, C., and Ng, L. F. Y. 2004. “Manufacturing Agglomeration as Incentives to Asian FDI in China after WTO.” Journal of Asian Economics, 15(4), 673-693.
Van Huffel, C., Luo, X. and Catin, M., 2005. “Openness, industrialization, and geographic concentration of activities in China.” Policy Research Working Paper Series 3706, The World Bank.
World Bank. 2007. World Development Indicators. Washington, D.C.: World Bank.