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Measured Skill Premia and Input Trade Liberalization: Evidence from Chinese Firms

In: Input Trade Liberalization in China

Author

Listed:
  • Bo Chen

    (Huazhong University of Science and Technology)

  • Miaojie Yu

    (Peking University)

  • Zhihao Yu

    (Carleton University)

Abstract

Using Chinese firm-level production data, this paper developed a Mincer (Schooling, experience and earnings. Columbia University Press for the National Bureau of Economic Research, 1974)-type approach to investigate the impact of input trade liberalization on firms’ wage inequality between skilled and unskilled workers (or skill premium). When controlling for product-market tariffs in a firm’s industry, we find robust evidence that reduced input tariffs in a firm’s industry are associated with a higher skill premium at firms with more skilled workforces. This effect is more pronounced at ordinary (non-processing) firms. We also provide evidence that reduced input tariffs in a firm’s industry are associated with higher value added and profits at firms with more skilled workforces.

Suggested Citation

  • Bo Chen & Miaojie Yu & Zhihao Yu, 2023. "Measured Skill Premia and Input Trade Liberalization: Evidence from Chinese Firms," Contributions to Economics, in: Input Trade Liberalization in China, pages 205-229, Springer.
    • Handle: RePEc:spr:conchp:978-981-99-7599-0_9
    DOI: 10.1007/978-981-99-7599-0_9
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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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