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(5/7) Chunbing Xing: The Regional Distribution of Skill Premia in Urban China and Implications for G

Time:2014-07-25 13:31:00   Click:  Source:CHLR
Presenter: Chunbing Xing

Topic: The Regional Distribution of Skill Premia in Urban China and Implications for Growth and Inequality

Time: 16:00-17:30, May 7th, 2013

Location: 608 Acedamic Hall

Abstract We document and discuss the implications of a sharp increase in the regional dispersion of skill premia in China in recent years. This has previously been little noted or discussed. We use three urban household surveys for 1995, 2002, and 2007 and estimate skill premia at provincial and city levels. Results show an increase in the skill premium across all regions between 1995 and 2002, but only coastal regions show significant increases in skill premia between 2002 and 2007. For 2007, coastal regions also have much higher within-region wage inequality, and this contributes more to overall urban wage inequality than within-region inequality of non-coastal regions. Using a fixed effects model at city level, we find that ownership restructuring is a significant factor in driving up skill premia during the first period (1995 to 2002), and that the ongoing process of China’s integration into the global economy plays a significant and regionally concentrated role in the second period (2002 to 2007). Finally, we suggest that the Hukou registration system may prevent skilled labour from moving to high skill premium regions and retard mobility-induced reductions in inequality. This effect may also retard even higher growth.

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