The Regional Distribution of Skill Premia in Urban China

31 Pages Posted: 6 Dec 2010 Last revised: 17 Apr 2022

See all articles by John Whalley

John Whalley

University of Western Ontario - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); Centre for International Governance and Innovation (CIGI)

Chunbing Xing

Renmin University of China

Date Written: December 2010

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, and that the ongoing process of China's integration into the global economy plays a significant and regionally concentrated role in the second period.

Suggested Citation

Whalley, John and Xing, Chunbing, The Regional Distribution of Skill Premia in Urban China (December 2010). NBER Working Paper No. w16575, Available at SSRN: https://ssrn.com/abstract=1719935

John Whalley (Contact Author)

University of Western Ontario - Department of Economics ( email )

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Chunbing Xing

Renmin University of China ( email )

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