nep-cna New Economics Papers
on China
Issue of 2013‒06‒24
five papers chosen by
Zheng Fang
Ohio State University

  1. Land Reform and Sex Selection in China By Douglas Almond; Hongbin Li; Shuang Zhang
  2. From Boston to Chinese parallel to deferred acceptance: Theory and experiments on a family of school choice mechanisms By Chen, Yan; Onur, Kesten
  3. Tariffs and the Organization of Trade in China By Peter M. Morrow; Loren Brandt
  4. Does Chinese Inflation Understate Cost of Living? By Cook, Jonathan Aaron
  5. China’s Savings Multiplier By Halvor Mehlum; Ragnar Torvik; Simone Valente

  1. By: Douglas Almond; Hongbin Li; Shuang Zhang
    Abstract: Following the death of Mao in 1976, abandonment of collective farming lifted millions from poverty and heralded sweeping pro-market policies. How did China’s excess in male births respond to rural land reform? In newly-available data from over 1,000 counties, a second child following a daughter was 5.5 percent more likely to be a boy after land reform, doubling the prevailing rate of sex selection. Mothers with higher levels of education were substantially more likely to select sons than were less educated mothers. The One Child Policy was implemented over the same time period and is frequently blamed for increased sex ratios during the early 1980s. Our results point to China’s watershed economic liberalization as a more likely culprit.
    JEL: I15 I25 I32 J13 K11 N35 P26 Q18
    Date: 2013–06
  2. By: Chen, Yan; Onur, Kesten
    Abstract: We characterize a parametric family of application-rejection school choice mechanisms, including the Boston and Deferred Acceptance mechanisms as special cases, and spanning the parallel mechanisms for Chinese college admissions, the largest centralized matching in the world. Moving from one extreme member to the other results in systematic changes in manipulability, stability and welfare properties. Neither the ex-post dominance of the DA over the equilibria of Boston, nor the ex-ante dominance of Boston equilibria over the DA in stylized settings extends to the parallel mechanisms. In the laboratory, participants are most likely to reveal their preferences truthfully under the DA mechanism, followed by the Chinese parallel and then the Boston mechanisms. Furthermore, while the DA is significantly more stable than the Chinese parallel mechanism, which is more stable than Boston, efficiency comparisons vary across environments. --
    Keywords: school choice,Boston mechanism,Chinese parallel mechanism,deferred acceptance,experiment
    JEL: C78 C92 D82
    Date: 2013
  3. By: Peter M. Morrow; Loren Brandt
    Abstract: This paper examines the impact of China's falling import tariffs on the organization of exports between ordinary and processing trade. These trade forms differ in terms of tariff treatment and the ability of firms to sell on the domestic market. At the industry level, we find that falling input tariffs are the source of 90 percent of the average increase in the share of exports occurring through ordinary trade, most of which occurs on the extensive margin through new entry. The choice of trade is also tied to the size of the domestic market, which processing firms cannot access. Consistent with the literature, we also document that the domestic content share of ordinary exports is 30 percentage points higher than for processing. Our back of the envelope calculations imply an increase in demand for local factors of production of 12-21 billion U.S. dollars in 2006 associated with the change in the composition of trade from processing to ordinary exports resulting from tariff cuts between 2000-2006.
    Keywords: China, Processing Trade, Domestic Content, Taris
    JEL: F14 F16
    Date: 2013–06–18
  4. By: Cook, Jonathan Aaron
    Abstract: The Chinese consumer price index slightly overstates the increase in the cost of living and thus understates the growth in real income. Over the period 1995 to 2002, we nd that the annual growth in median urban household income de ated by the cost of living was 7%, which is close to the growth in real GDP during this time. When de ated by ocial CPI, the median urban household sees only a 3% increase in real income.
    Keywords: Demand and Price Analysis,
    Date: 2013
  5. By: Halvor Mehlum; Ragnar Torvik; Simone Valente
    Abstract: China’s growth is characterized by massive capital accumulation, made possible by high and increasing domestic savings. In this paper we develop a model with the aim of explaining why savings rates have been high and increasing,and we investigate the general equilibrium effects on capital accumulation and growth. We show that increased savings and capital accumulation stimulates further savings and capital accumulation, through an intergenerational distribution effect and an old-age requirement effect. We introduce what we term the savings multiplier, and we discuss why and how the one-child policy, and the dismantling of the cradle-to-grave social bene?ts provided through the state owned enterprises, have stimulated savings and capital accumulation.
    Keywords: China, One-child policy, Overlapping generations, Growth, Savings
    JEL: O11 D91 E21
    Date: 2013–06

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