Nottingham Centre for Research on
Globalisation and Economic Policy (GEP)

GEP 19/07: Export destinations and skill premium: Evidence from chinese manufacturing industries

Abstract

This paper examines the relationship between average income of export destinations and skill premium using data of Chinese manufacturing industries from 1995 to 2008. To do so, we construct weighted average GDP per capita across destinations employing within-industry export share to each destination as weight, and then link it with industry-level wages and skill premium. We find that industries that export more to high-income destinations tend to pay a higher skill premium, suggesting that on average, skilled workers benefit more from high-income exports than unskilled workers. Our IV estimates confirm a causal relationship and the results are robust to various specifications. Our paper contributes to the understanding of the influence of export destinations on the uneven distributional effects of globalisation for different types of workers.

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Authors  

Feicheng Wang, Chris Milner and Juliane Scheffel   

 

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Posted on Wednesday 20th March 2019

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