nep-cna New Economics Papers
on China
Issue of 2015‒07‒04
nine papers chosen by
Zheng Fang
Ohio State University

  1. Estimating the External Returns to Education: Evidence from China By Fan, Wen; Ma, Yuanyuan; Wang, Liming
  2. Children of Migrants: The Cumulative Impact of Parental Migration on their Children's Education and Health Outcomes By Xin Meng; Chikako Yamauchi
  3. Hukou and highways : the impact of China?s spatial development policies on urbanization and regional inequality By Bosker,Maarten; Deichmann,Uwe; Roberts,Mark
  4. Can Bureaucrats Really Be Paid Like CEOs? School Administrator Incentives for Anemia Reduction in Rural China By Renfu Luo; Grant Miller; Scott Rozelle; Sean Sylvia; Marcos Vera-Hernández
  5. Women in the labour market in China By Dasgupta, Sukti; Matsumoto, Makiko; Xia, Cuntao
  6. Analysis of Child Gender Discrimination Based on Adults' Consumption Patterns: Microdata Evidence from China By Feridoon Koohi-Kamali; R. Liu; Y. Liu
  7. Measuring Child Poverty by the Rothbarth Scales: Estimates for an Urban Chinese East Coast Province By Feridoon Koohi-Kamali; Yibin Liu
  8. Does Financing of Chinese Mergers and Acquisitions Have “Chinese Characteristics”? By Lulu Gu; W. Robert Reed
  9. Product Differentiation, Export Participation and Productivity Growth: Evidence from Chinese Manufacturing Firms By Hu, Cui; Tan, Yong

  1. By: Fan, Wen (Nanjing University); Ma, Yuanyuan (Trinity College Dublin); Wang, Liming (University College Dublin)
    Abstract: Using longitudinal data from the China Health and Nutrition Survey, we examine how individual wages change in line with the share of college graduates in a given province. The individual fixed effect model shows that the external returns to education in China appear to be zero. We estimate an instrumental variables fixed effects model where share of college graduates is instrumented by the number of universities with special status and find positive external returns to education of about 10 per cent to 14 per cent. We also find that the returns are affected by individual heterogeneity. While negligible returns are found for urban, women, and high-educated workers, the returns are positive and statistically significant for rural, men, and low-educated workers. This finding provides the motivation for increasing education investment in rural China and targeting it more toward poorly educated workers.
    Keywords: education, public investment, externalities, China
    JEL: J0 J24 O15
    Date: 2015–06
  2. By: Xin Meng (Research School of Economics, CBE, Australian National University); Chikako Yamauchi (GRIPS)
    Abstract: In the past 15 years, around 160 million Chinese rural workers migrated to cities for work. Because of restrictions on migrant access to local health and education system, many migrant children are left-behind in rural villages and growing up without parental care. This paper examines how parental migration affects children's health and education outcomes in the long run. Using the Rural-Urban Migration Survey in China (RUMiC) data, we measure the share of children's lifetime during which parents were away from home. We instrument this measure of parental absence with weather changes in their home villages when parents were aged 16-25, or when they were most likely to initiate migration. Results show a sizable adverse impact of exposure to parental migration on the health and education outcomes of children, in particular boys. We also find that what the literature has always done (using contemporaneous measure for parental migration) is likely to underestimate the effect of exposure to parental migration on children's outcomes.
    Date: 2015–06
  3. By: Bosker,Maarten; Deichmann,Uwe; Roberts,Mark
    Abstract: China has used two main spatial policies to shape its geographic patterns of development: restricted labor mobility through the Hukou residential registration system and massive infrastructure investment, notably a 96,000 kilometer national expressway network. This paper develops a structural new economic geography model to examine the impacts of these policies. Fitting the model to available data allows simulating counterfactual scenarios comparing each policy?s respective impact on regional economic development and urbanization patterns across China. The results suggest large overall economic benefits from constructing the national expressway network and abolishing the Hukou system. Yet, the spatial impacts of the two policies are very different. The construction of the national expressway network reinforced existing urbanization patterns. The initially lagging regions not connected to the network have not benefitted much from its construction. By contrast, removal of the Hukou restrictions, which Chinese policy makers are considering, would result in much more widespread welfare gains, allowing everyone to gain by moving to where he or sheis most productive. Removal of the Hukou restrictions would also promote urbanization in currently lagging (inland) regions, mostly by stimulating rural to urban migration.
    Keywords: Transport Economics Policy&Planning,National Urban Development Policies&Strategies,Economic Theory&Research,Population Policies,Labor Policies
    Date: 2015–06–30
  4. By: Renfu Luo; Grant Miller; Scott Rozelle; Sean Sylvia; Marcos Vera-Hernández
    Abstract: A large literature examines performance pay for managers in the private sector, but little is known about performance pay for managers in public sector bureaucracies. In this paper, we study performance incentives rewarding school administrators for reducing anemia among their students. Randomly assigning 170 schools to three performance incentive levels and two orthogonal sizes of unconditional grants, we analyze performance pay and its complementarity with discretionary resources. We find that both large incentives and larger unconditional grants reduced anemia substantially, but incentives were more cost-effective. Performance incentives led administrators to innovate by working with parents, mitigating potentially offsetting compensatory behavior among households. Strikingly, we also find that larger unconditional grants completely crowded-out the effect of incentives. Our findings suggest that performance incentives can be effective in bureaucratic environments – but also that discretionary resources can fully crowd-out their effect.
    JEL: C93 H40 I12 M52 O15
    Date: 2015–06
  5. By: Dasgupta, Sukti; Matsumoto, Makiko; Xia, Cuntao
    Abstract: Although the rate is relatively high in China, it has declined in recent years, as has the employment to population ratio. Furthermore, there is a significant wage gap between women in and men, much of which remains “unexplained” when we carry out a decomposition analysis. To improve gender equality in the labour market, the paper points to four areas that require further attention from a policy perspective: (1) measures to promote equal access to employment for women and men; (2) creation of an enabling environment for workers with family responsibilities; (3) improved coverage of social security measures, especially for rural women; and (4) design of an appropriate retirement policy.
    Keywords: gender equality, sex discrimination, women workers, labour market, employment, income, care work, social security, retirement, China, égalité des genres, discrimination fondée sur le sexe, travailleuses, marché du travail, emploi, revenu, prestations de soins, sécurité sociale, retraite, Chine, igualdad de géneros, discriminación por razones de sexo, trabajadoras, mercado de trabajo, empleo, ingreso, prestación de cuidados, seguridad social, jubilación, China
    Date: 2015
  6. By: Feridoon Koohi-Kamali; R. Liu; Y. Liu
    Abstract: The applications of the Rothbarth model of inferring child gender discrimination from the variations in parental living standard have consistently failed to uncover evidence for bias from surveys in countries with some of the world's worst welfare outcomes for girls. This paper demonstrates the importance of the remedies required for an effective implementation of that model with an application to a survey from urban China. The paper obtains econometric evidence for the presence of child gender bias for the survey by non-parametric and semiparametric methods in addition to the standard parametric estimates. The results reported for three categories of adult goods all suggest bias against girls, in contrast to those reported in earlier applications of the model to China. The additional probit estimates of the probability of having a second child conditional on the gender of the first child provide further support for our findings. The test results cast doubts on the previous findings that claim the Rothbarth model of gender discrimination to be ineffective in identifying evidence of bias from consumption patterns.
    Date: 2015–06
  7. By: Feridoon Koohi-Kamali; Yibin Liu
    Abstract: The commonly employed Engel method of poverty measurement, based on the budget share of food, is known to lead to a large overestimation of age-specific poverty. This paper applies an alternative model based on variations in adults' living standard that offers a particularly effective method of obtaining age-specific poverty measures, especially for children. However, only a few studies using this alternative model are available. This paper contributes to that small body of studies based on the latter model by applying it to two urban surveys from an east coast province of China for 2002 and 2009. We obtain measures of child poverty that have plausible values in size when compared to those reported for other studies using the same method. Our results indicate that the extremely high Chinese rates of economic growth during 2002-09 have had only a modest impact on child poverty, and an almost negligible impact on extreme child poverty. The paper points to rising urban inequality as the most likely explanation of the results obtained.
    Date: 2015–06
  8. By: Lulu Gu; W. Robert Reed (University of Canterbury)
    Abstract: This paper investigates two hypotheses about Chinese financing of mergers and acquisitions (M&As). The first hypothesis is that foreign ownership restrictions by the government cause Chinese acquirers to rely more on cash to finance their overseas M&A deals. The second hypothesis is that state-owned enterprizes (SOEs) will rely more on cash to finance their M&A deals because they are able to secure better borrowing terms. We collate data from four databases to obtain a sample of over 6000 M&A deals that were completed during the 1997-2014 period. We find strong evidence to support the first hypothesis but not the second.
    Keywords: Mergers and acquisitions (M&As), foreign ownership restrictions, state owned enterprises (SOEs), M&A financing, Chinese firms
    JEL: G34 G28 N20
    Date: 2015–06–22
  9. By: Hu, Cui; Tan, Yong
    Abstract: In this paper, we investigate how the degree of export participation and product differentiation affect firms’ productivity growth through learning-by-exporting. We extend the model of Melitz and Ottaviano (2008) to endogenize the effort firms allocate to learning. This choice depends on both the degree to which firms enter export markets and the extent to which products are differentiated across producers. Using a firm-level dataset from China’s manufacturing industries, we implement propensity score matching methods to test the model’s predictions. Our results indicate that the degree of export participation is positively correlated with TFP improvements. Simultaneously, we empirically verify that firms exporting less differentiated products experience faster TFP growth than those exporting more differentiated products.
    Keywords: Export participation, Product differentiation, TFP, Learning-by-exporting.
    JEL: D24 F1 L1
    Date: 2015–01–27

This nep-cna issue is ©2015 by Zheng Fang. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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