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on China |
| By: | Fariha Kamal; Mary E. Lovely; Devashish Mitra |
| Abstract: | We estimate the extent to which firms responded to tariff reductions associated with China’s WTO entry by altering labor’s share of value. Firm-level regressions indicate that firms in industries subject to tariff cuts raised labor’s share relative to economy-wide trends, both through input choices and rent sharing. Labor’s share of value is an estimated 12 percent higher in 2007 than it would be if tariffs had remained at their 1998 levels. There is significant variation across firms: the impact is larger where market access is better and it is influenced by union presence and state ownership. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:14-24&r=cna |
| By: | Ashournia, Damoun (University of Oxford); Munch, Jakob R. (University of Copenhagen); Nguyen, Daniel (University of Copenhagen) |
| Abstract: | The impact of imports from low-wage countries on domestic labor market outcomes has been a hotly debated issue for decades. The recent surge in imports from China has reignited this debate. Since the 1980s several developed economies have experienced contemporaneous increases in the volume of imports and in the wage gap between high- and low-skilled workers. However, the literature has not been able to document a strong causal relationship between imports and the wage gap. Instead, past studies have attributed the widening wage gap to skill biased technological change. This paper finds evidence for the direct impact of low wage imports on the wage gap. Using detailed Danish panel data for firms and workers, it measures the effects of Chinese import penetration at the firm level on wages within job-spells and over the longer term taking transitions in the labor market into account. We find that greater exposure to Chinese imports corresponds to a negative firm-level demand shock, which is biased towards low-skill intensive products. Consistent with this, an increase in Chinese import penetration results in lower wages for low-skilled employees. |
| Keywords: | Chinese import penetration, wage inequality, firm heterogeneity |
| JEL: | F16 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8166&r=cna |
| By: | Connelly, Rachel (Bowdoin College); Iannotti, Michael (Bates College); Maurer-Fazio, Margaret (Bates College); Zhang, Dandan (Peking University) |
| Abstract: | As China moves into the ranks of aged societies, coresidency of elders with their adult children has become an increasingly important policy concern. This article utilizes data from the 2000 Population Census of China and the 2011 Chinese Household Ethnicity Survey (CHES) to analyze coresidency patterns of rural elders in seven Chinese provinces with high concentrations of ethnic minority populations. We also explore one consequence of coresidency, reported happiness. We find that socioeconomic variables matter in the determination of coresidency in China in ways that are very similar to their roles in other countries. However, changes between 2000 and 2011 in the effects of age and widowhood show that coresidency decisions among rural elders provinces are transitioning from child-centric to parent-centric. Our analysis also reveals the large role cultural norms play in determining coresidency, as evidenced by differences across ethnic groups. The CHES data allow us to compare coresidency across ethnicity with respect to both individual and regional degrees of assimilation versus isolation. Elders who do not speak Mandarin have higher rates of coresidency than those who do. Additionally, those who live in counties with low rates of intermarriage and intergroup friendships are also more likely to coreside. In exploring the determinants of happiness, we find again that socioeconomic and demographic conditions matter, as does ethnicity. Controlling all else, coresidency increases the happiness of the elderly by about 28 percent. Moreover, the unobserved characteristics that drive coresidency are highly detrimental to the happiness of the elderly. |
| Keywords: | coresidency, happiness, ethnicity, Minzu, global life satisfaction, elders, living arrangements, China Household Ethnicity Survey, China |
| JEL: | D13 J12 J14 J15 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8194&r=cna |
| By: | Dai, Li; Minford, Patrick (Cardiff Business School); Zhou, Peng (Cardiff Business School) |
| Abstract: | We use available methods for testing macro models to evaluate a model of China over the period from Deng Xiaoping’s reforms up until the crisis period. Bayesian ranking methods are heavily influenced by controversial priors on the degree of price/wage rigidity. When the overall models are tested by Likelihood or Indirect Inference methods, the New Keynesian model is rejected in favour of one with a fair-sized competitive product market sector. This model behaves quite a lot more ‘flexibly’ than the New Keynesian. |
| Keywords: | China; DSGE; Bayesian Inference; Indirect Inference |
| JEL: | C11 C15 C18 E27 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2014/4&r=cna |
| By: | Busse, Matthias; Erdogan, Ceren; Muehlen, Henning |
| Abstract: | We investigate the impact of Chinese activities in sub-Saharan African countries with respect to the growth performance of economies in that region. Using a Solow-type growth model and panel data for the period 1991 to 2011, we find that African economies that export natural resources have benefited from positive terms-of-trade effects. In addition, there is evidence for displacement effects of African firms due to competition from China. Chinese foreign investment and aid in Africa does not have an impact on growth. |
| Keywords: | China; Sub-Saharan Africa; Trade; FDI; Foreign aid; Economic growth; South-south cooperation |
| JEL: | F14 F23 F35 O47 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bom:ieewps:206&r=cna |
| By: | Francisco Costa; Jason Garred; Joao Paulo Pessoa |
| Abstract: | A recent boom in commodities-for-manufactures trade between China and other developing countries has led to much concern about the losers from rising import competition in manufacturing, but little attention on the winners from growing Chinese demand for commodities. Using census data for Brazil, we find that local labour markets more affected by Chinese import competition experienced slower growth in manufacturing wages and in-migration rates between 2000 and 2010, and greater rises in local wage inequality. However, in locations benefiting from rising Chinese demand, we observe higher wage growth, lower takeup of cash transfers and positive effects on job quality. |
| Keywords: | China, trade, commodities-for manufactures, wages, employment, informality |
| JEL: | F14 F16 O17 Q17 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1269&r=cna |
| By: | Charles Yuji Horioka |
| Abstract: | This paper discusses three alternative assumptions concerning household preferences (altruism, self-interest, and a desire for dynasty building) and shows that these assumptions have very different implications for bequest motives and bequest division. After reviewing some of the literature on actual bequests, bequest motives, and bequest division, the paper presents data on the strength of bequest motives, stated bequest motives, and bequest division plans from a new international survey conducted in China, India, Japan, and the United States. It finds striking inter-country differences in bequest plans, with the bequest plans of Americans and Indians appearing to be much more consistent with altruistic preferences than those of the Japanese and Chinese and the bequest plans of the Japanese and Chinese appearing to be much more consistent with selfish preferences than those of Americans and Indians. These findings have important implications for the efficacy and desirability of stimulative fiscal policies, public pensions, and inheritance taxes. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0901&r=cna |
| By: | Huang, Yiping (Asian Development Bank Institute); Wang, Daili (Asian Development Bank Institute); Fan, Gang (Asian Development Bank Institute) |
| Abstract: | In this paper we try to address the question of what could help make the renminbi (RMB) a reserve currency. In recent years, the authorities in the People's Republic of China (PRC) have made efforts to internationalize its currency through a two-track strategy: promotion of the use of the RMB in the settlement of cross-border trade and investment, and liberalization of the capital account. We find that if we use only the quantitative measures of the economy, the predicted share of the RMB in global reserves could reach 12%. However, if institutional and market variables are included, the predicted share comes down to around 2%, which is a more realistic prediction. By reviewing experiences of other reserve currencies, we propose a three-factor approach for the PRC authorities to promote the international role of the RMB: (i) increasing the opportunities of using RMB in the international community, which requires relatively rapid growth of the PRC economy and continuous liberalization of trade and investment; (ii) improving the ease of using RMB, which requires depth, sophistication, and liquidity of financial markets; and (iii) strengthening confidence of using RMB, which requires more transparent monetary policy making, a more independent legal system, and some political reforms. In general, we believe that the RMB's international role should increase in the coming years, but it will take a relatively long period before it plays the role of a global reserve currency. |
| Keywords: | RMB internationalization; reserve currency; anchor currency; capital account openness |
| JEL: | F30 F33 F36 F42 |
| Date: | 2014–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0482&r=cna |