Effects of WTO Membership on Income Distribution and Labour Movement in China - A CGE Analysis
71 Pages Posted: 27 Jul 2007
Date Written: December 30, 2005
Abstract
Using a CGE model (PRCGEM) updated to 2002, the paper explores how WTO membership could affect earnings in 40 industries across 31 regions (and 8 regional blocks) of China during the period 2002-2007. Taking into account labour movement between regions within China, the direct contribution of WTO membership to overall economic growth and development is predicted to be small, with a rise in real GDP of only 6.48% short term and 5.6% long term. However, structural economic change and the WTO shock should increase regional output, especially in the established coastal economies. Regional labour movement is found to increase 69.2% at the completion of economic structural reforms. A slight decrease in the Gini coefficient for income inequality is also anticipated.
Keywords: applied CGE modelling, China, WTO, labour movement, inequality
JEL Classification: C68, O18, R12, R23
Suggested Citation: Suggested Citation
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