IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v165y2023ics0304387823001049.html
   My bibliography  Save this article

Quota removal, destination-specific export shocks, and skill acquisition in China

Author

Listed:
  • Zhang, Junsen
  • Zhou, Kang

Abstract

This paper uses the exposure of 16-year-old cohorts to an exogenous elimination of export quotas to explore the short-run schooling consequence of destination-specific export expansions and the longer-run effects on adult outcomes. We find that export expansions to rich-country markets resulted in substantially higher high school enrollment rates. The expansions disproportionately favored urban children and children in regions with lower initial skill endowment. Subsequently, the effects translate into the achievement of high school attainment but not the achievement of college and above education. More than a decade later, the affected cohorts exhibit significant differences in employment and fertility outcomes, highlighting the persistent effects of the shocks. Finally, we provide evidence that human capital effects work through an increased educational investment of households, driven by a mechanism involving parental wage growth and education premium in local labor markets.

Suggested Citation

  • Zhang, Junsen & Zhou, Kang, 2023. "Quota removal, destination-specific export shocks, and skill acquisition in China," Journal of Development Economics, Elsevier, vol. 165(C).
    • Handle: RePEc:eee:deveco:v:165:y:2023:i:c:s0304387823001049
    DOI: 10.1016/j.jdeveco.2023.103149
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304387823001049
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jdeveco.2023.103149?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Greenland, Andrew & Lopresti, John, 2016. "Import exposure and human capital adjustment: Evidence from the U.S," Journal of International Economics, Elsevier, vol. 100(C), pages 50-60.
    2. Aline Bütikofer & Kjell G Salvanes, 2020. "Disease Control and Inequality Reduction: Evidence from a Tuberculosis Testing and Vaccination Campaign," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(5), pages 2087-2125.
    3. Greg Kaplan & Sam Schulhofer‐Wohl, 2017. "Understanding The Long‐Run Decline In Interstate Migration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(1), pages 57-94, February.
    4. Balsvik, Ragnhild & Jensen, Sissel & Salvanes, Kjell G., 2015. "Made in China, sold in Norway: Local labor market effects of an import shock," Journal of Public Economics, Elsevier, vol. 127(C), pages 137-144.
    5. Loren Brandt & Johannes Van Biesebroeck & Luhang Wang & Yifan Zhang, 2017. "WTO Accession and Performance of Chinese Manufacturing Firms," American Economic Review, American Economic Association, vol. 107(9), pages 2784-2820, September.
    6. Rosario Crinò & Paolo Epifani, 2012. "Productivity, Quality and Export Behaviour," Economic Journal, Royal Economic Society, vol. 122(565), pages 1206-1243, December.
    7. Yuan Tian, 2020. "International trade liberalization and domestic institutional reform: Effects of WTO accession on Chinese internal migration policy," Discussion Papers 2020-17, University of Nottingham, GEP.
    8. David Atkin, 2016. "Endogenous Skill Acquisition and Export Manufacturing in Mexico," American Economic Review, American Economic Association, vol. 106(8), pages 2046-2085, August.
    9. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    10. Chun-Chung Au & J. Vernon Henderson, 2006. "Are Chinese Cities Too Small?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(3), pages 549-576.
    11. Li, Bingjing, 2018. "Export expansion, skill acquisition and industry specialization: evidence from china," Journal of International Economics, Elsevier, vol. 114(C), pages 346-361.
    12. Irene Brambilla & Amit K. Khandelwal & Peter K. Schott, 2010. "China's Experience under the Multi-Fiber Arrangement (MFA) and the Agreement on Textiles and Clothing (ATC)," NBER Chapters, in: China's Growing Role in World Trade, pages 345-387, National Bureau of Economic Research, Inc.
    13. Meixin Guo & Lin Lu & Liugang Sheng & Miaojie Yu, 2018. "The Day After Tomorrow: Evaluating the Burden of Trump's Trade War," Asian Economic Papers, MIT Press, vol. 17(1), pages 101-120, Winter/Sp.
    14. Eric V. Edmonds & Nina Pavcnik & Petia Topalova, 2010. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 42-75, October.
    15. Mark M. Pitt & Mark R. Rosenzweig & Mohammad Nazmul Hassan, 2012. "Human Capital Investment and the Gender Division of Labor in a Brawn-Based Economy," American Economic Review, American Economic Association, vol. 102(7), pages 3531-3560, December.
    16. Shushanik Hakobyan & John McLaren, 2016. "Looking for Local Labor Market Effects of NAFTA," The Review of Economics and Statistics, MIT Press, vol. 98(4), pages 728-741, October.
    17. Greg Kaplan & Sam Schulhofer‐Wohl, 2017. "Understanding The Long‐Run Decline In Interstate Migration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58, pages 57-94, February.
    18. Wolfgang F. Stolper & Paul A. Samuelson, 1941. "Protection and Real Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 9(1), pages 58-73.
    19. Trevor Tombe & Xiaodong Zhu, 2019. "Trade, Migration, and Productivity: A Quantitative Analysis of China," American Economic Review, American Economic Association, vol. 109(5), pages 1843-1872, May.
    20. Anna Piil Damm & Christian Dustmann, 2014. "Does Growing Up in a High Crime Neighborhood Affect Youth Criminal Behavior?," American Economic Review, American Economic Association, vol. 104(6), pages 1806-1832, June.
    21. Brandt, Loren & Van Biesebroeck, Johannes & Zhang, Yifan, 2012. "Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing," Journal of Development Economics, Elsevier, vol. 97(2), pages 339-351.
    22. Rosario Crinò & Paolo Epifani, 2014. "Trade Imbalances, Export Structure and Wage Inequality," Economic Journal, Royal Economic Society, vol. 0(576), pages 507-539, May.
    23. Rosenzweig, Mark R. & Zhang, Junsen, 2013. "Economic growth, comparative advantage, and gender differences in schooling outcomes: Evidence from the birthweight differences of Chinese twins," Journal of Development Economics, Elsevier, vol. 104(C), pages 245-260.
    24. James J. Heckman, 2008. "Schools, Skills, And Synapses," Economic Inquiry, Western Economic Association International, vol. 46(3), pages 289-324, July.
    25. Amit K. Khandelwal & Peter K. Schott & Shang-Jin Wei, 2013. "Trade Liberalization and Embedded Institutional Reform: Evidence from Chinese Exporters," American Economic Review, American Economic Association, vol. 103(6), pages 2169-2195, October.
    26. Huang, Wei & Liu, Hong, 2023. "Early childhood exposure to health insurance and adolescent outcomes: Evidence from rural China," Journal of Development Economics, Elsevier, vol. 160(C).
    27. Li, Jie & Lu, Yi & Song, Hong & Xie, Huihua, 2019. "Long-term impact of trade liberalization on human capital formation," Journal of Comparative Economics, Elsevier, vol. 47(4), pages 946-961.
    28. Junsen Zhang, 2021. "A Survey on Income Inequality in China," Journal of Economic Literature, American Economic Association, vol. 59(4), pages 1191-1239, December.
    29. Leonardo Bursztyn & Lucas C. Coffman, 2012. "The Schooling Decision: Family Preferences, Intergenerational Conflict, and Moral Hazard in the Brazilian Favelas," Journal of Political Economy, University of Chicago Press, vol. 120(3), pages 359-397.
    30. Jessamyn Schaller, 2016. "Booms, Busts, and Fertility: Testing the Becker Model Using Gender-Specific Labor Demand," Journal of Human Resources, University of Wisconsin Press, vol. 51(1), pages 1-29.
    31. Gauri Kartini Shastry, 2012. "Human Capital Response to Globalization: Education and Information Technology in India," Journal of Human Resources, University of Wisconsin Press, vol. 47(2), pages 287-330.
    32. Kaivan Munshi & Mark Rosenzweig, 2006. "Traditional Institutions Meet the Modern World: Caste, Gender, and Schooling Choice in a Globalizing Economy," American Economic Review, American Economic Association, vol. 96(4), pages 1225-1252, September.
    33. Brian, McCaig, 2011. "Exporting out of poverty: Provincial poverty in Vietnam and U.S. market access," Journal of International Economics, Elsevier, vol. 85(1), pages 102-113, September.
    34. Thomas Cornelissen & Christian Dustmann, 2019. "Early School Exposure, Test Scores, and Noncognitive Outcomes," American Economic Journal: Economic Policy, American Economic Association, vol. 11(2), pages 35-63, May.
    35. Zhang, Junsen & Zhao, Yaohui & Park, Albert & Song, Xiaoqing, 2005. "Economic returns to schooling in urban China, 1988 to 2001," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 730-752, December.
    36. Robert Jensen, 2010. "The (Perceived) Returns to Education and the Demand for Schooling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(2), pages 515-548.
    37. Miaojie Yu, 2015. "Processing Trade, Tariff Reductions and Firm Productivity: Evidence from Chinese Firms," Economic Journal, Royal Economic Society, vol. 125(585), pages 943-988, June.
    38. Zhou, Kang & Zhang, Junsen, 2021. "Trade normalization, export quality, and in-migration of skilled workers: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 375-387.
    39. Deininger, Klaus, 2003. "Does cost of schooling affect enrollment by the poor? Universal primary education in Uganda," Economics of Education Review, Elsevier, vol. 22(3), pages 291-305, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cai, Shu & Shi, Xinzheng & Xu, Zhufeng, 2024. "Migration networks, export shocks, and human capital acquisition: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 52(2), pages 568-589.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Bingjing, 2018. "Export expansion, skill acquisition and industry specialization: evidence from china," Journal of International Economics, Elsevier, vol. 114(C), pages 346-361.
    2. Yu, Zhen & Wu, Xiaoling & Li, Meng & Guo, Rufei, 2021. "Import competition and the gender gap in labor force participation: Evidence from China," China Economic Review, Elsevier, vol. 69(C).
    3. Lin, Faqin & Long, Cheryl X., 2020. "The impact of globalization on youth education: Empirical evidence from China's WTO accession," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 820-839.
    4. Nano, Enrico & Nayyar, Gaurav & Rubínová, Stela & Stolzenburg, Victor, 2021. "The impact of services liberalization on education: Evidence from India," WTO Staff Working Papers ERSD-2021-10, World Trade Organization (WTO), Economic Research and Statistics Division.
    5. Mingzhi Xu, 2020. "Globalization, the skill premium, and income distribution: the role of selection into entrepreneurship," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(3), pages 633-668, August.
    6. Wei Luo & Xianqiang Zou, 2024. "Demographic impacts of China’s trade liberalization: marriage, spousal quality, and fertility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(3), pages 1-31, September.
    7. Dai, Mi & Huang, Wei & Zhang, Yifan, 2021. "How do households adjust to tariff liberalization? Evidence from China's WTO accession," Journal of Development Economics, Elsevier, vol. 150(C).
    8. Faqin Lin, 2022. "Agriculture exports, child labor and youth education: Evidence from 68 developing countries," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 490-513, May.
    9. Cai, Shu & Shi, Xinzheng & Xu, Zhufeng, 2024. "Migration networks, export shocks, and human capital acquisition: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 52(2), pages 568-589.
    10. Dai, Mi & Huang, Wei & Zhang, Yifan, 2020. "Persistent effects of initial labor market conditions: The case of China's tariff liberalization after WTO accession," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 566-581.
    11. Zhou, Kang & Zhang, Junsen, 2021. "Trade normalization, export quality, and in-migration of skilled workers: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 375-387.
    12. Blanchard, Emily J. & Olney, William W., 2017. "Globalization and human capital investment: Export composition drives educational attainment," Journal of International Economics, Elsevier, vol. 106(C), pages 165-183.
    13. Ghose,Devaki, 2021. "Trade, Internal Migration, and Human Capital : Who Gains from India’s IT Boom?," Policy Research Working Paper Series 9738, The World Bank.
    14. Liu, Chen & Ma, Xiao, 2018. "China's Export Surge and the New Margins of Trade," MPRA Paper 103970, University Library of Munich, Germany, revised Oct 2020.
    15. Facchini, Giovanni & Liu, Maggie Y. & Mayda, Anna Maria & Zhou, Minghai, 2019. "China's “Great Migration”: The impact of the reduction in trade policy uncertainty," Journal of International Economics, Elsevier, vol. 120(C), pages 126-144.
    16. César, Andrés & Falcone, Guillermo & Gasparini, Leonardo, 2021. "Costs and benefits of trade shocks: Evidence from Chilean local labor markets," Labour Economics, Elsevier, vol. 73(C).
    17. Shuai Chen & Faqin Lin & Xi Yao & Peng Zhang, 2020. "WTO accession, trade expansion, and air pollution: Evidence from China’s county‐level panel data," Review of International Economics, Wiley Blackwell, vol. 28(4), pages 1020-1045, September.
    18. Azam, Mehtabul, 2022. "Trade Liberalization and Human Capital Accumulation: Evidence from Indian Census," IZA Discussion Papers 15286, Institute of Labor Economics (IZA).
    19. Heath, Rachel & Mushfiq Mobarak, A., 2015. "Manufacturing growth and the lives of Bangladeshi women," Journal of Development Economics, Elsevier, vol. 115(C), pages 1-15.
    20. Kevin Williams, 2023. "Does trade shape educational decisions? The role of initial schooling," Economic Change and Restructuring, Springer, vol. 56(5), pages 3631-3663, October.

    More about this item

    Keywords

    Export expansion; Quota removal; Educational attainment; Adult outcomes;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:165:y:2023:i:c:s0304387823001049. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/devec .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.