nep-cna New Economics Papers
on China
Issue of 2016‒06‒25
eight papers chosen by
Zheng Fang
Ohio State University

  1. A Better Vision for Development: Eyeglasses and Academic Performance in Rural Primary Schools in China By Albert Park; Paul Glewwe; Meng Zhao
  2. Unfolding the Turbulent Century: A Reconstruction of China's Economic Development, 1840-1912 By MA, Ye; JONG, Herman de
  3. What Explains Herd Behavior in the Chinese Stock Market? By Chong, Terence Tai-Leung; Liu, Xiaojin; Zhu, Chenqi
  4. Understanding the Recent Trend of Income Inequality in China By Juzhong Zhuang; Shi Li
  5. Empirical Analysis of the Main Factors Influencing Rice Harvest Losses Based on Sampling Survey Data of 10 Provinces in China By Wu, Linhai; Hu, Qipeng; Zhu, Dian; Wang, Jianhua
  6. Investigating the Relationship between Land and Labor Endowments and Agricultural Mechanization among Chinese Farmers By Yating, Zeng; Yanhong, Jin; Zhong, Tang
  7. Child Labor in China By Tang, Can; Zhao, Liqiu; Zhao, Zhong
  8. Divergence of Human Capital in Cities in the People’s Republic of China: Exploring Complementarities and Spatial Agglomeration of the Workforce with Various Skills By Liang, Wenquan; Lu, Ming

  1. By: Albert Park (Division of Social Science, Hong Kong University of Science and Technology; Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Paul Glewwe (Department of Applied Economics, University of Minnesota); Meng Zhao (Faculty of International Social Sciences, Gakushuin University)
    Abstract: About 10% of primary school students in developing countries have poor vision, but very few of them wear glasses. Almost no research examines the impact of poor vision on school performance, and simple OLS estimates could be biased because studying harder may adversely affects one’s vision. This paper presents results from a randomized trial in Western China that offered free eyeglasses to rural primary school students. Our preferred estimates, which exclude township pairs for which students in the control township were mistakenly provided eyeglasses, indicate that wearing eyeglasses for one academic year increased the average test scores of students with poor vision by 0.16 to 0.22 standard deviations, equivalent to 0.3 to 0.5 additional years of schooling. These estimates are averages across the two counties where the intervention was conducted. We also find that the benefits are greater for under-performing students. A simple cost-benefit analysis suggests very high economic returns to wearing eyeglasses, raising the question of why such investments are not made by most families. We find that girls are more likely to refuse free eyeglasses, and that parental lack of awareness of vision problems, mothers’ education, and economic factors (expenditures per capita and price) significantly affect whether children wear eyeglasses in the absence of the intervention.
    Keywords: poor vision, impaired eyesight, school performance, eyeglasses, eyesight, academic performance
    Date: 2016–06
  2. By: MA, Ye; JONG, Herman de
    Abstract: This paper reconstructs China's economic development between 1840 and 1912 with an estimation of Gross Domestic Product (GDP). It provides for the first time a time series of GDP (per capita) for the late Qing Dynasty (1644-1911), based on sectoral output and value added, in current as well as in constant prices. The present estimation of per capita GDP in the late Qing period comes out higher than previous estimations, but it still suggests low average levels of Chinese living standards. The economy during the late Qing Empire was characterised by a large and growing agricultural sector and displayed only minor structural changes. Only in the beginning of the twentieth century did the economy start to show signs of growth.
    Keywords: China, GDP, 19th century, living standards
    JEL: E01 N15 O11
    Date: 2016–05
  3. By: Chong, Terence Tai-Leung; Liu, Xiaojin; Zhu, Chenqi
    Abstract: This paper examines the causes of herd behavior in the Chinese stock market. Using the non-linear model of Chang, Cheng and Khorana (2000), we find robust evidence of herding in both the up and down markets. We contribute to the existing literature by exploring the underlying reasons for herding in China. It is shown that analyst recommendation, short-term investor horizon, and risk are the principal causes of herding. However, we cannot find evidence that relates herding to firm size, nor can we detect significant differences in herding between state-owned enterprises (SOE) and non-SOEs.
    Keywords: A-share market; Herd behavior; Return dispersion; Systemic risk.
    JEL: G15
    Date: 2016–06–19
  4. By: Juzhong Zhuang (Asian Development Bank, also associate of Department of Economics, SOAS, University of London, UK); Shi Li (Beijing Normal University, China)
    Abstract: This paper examines underlying factors that could explain the decline in income inequality in China since 2008 and inquires whether the decline indicates Chinaís income inequality has peaked following the Kuznets hypothesis. The paper first identifies four key drivers of rising income inequality in China since the mid-1980: rising skill premium, declining share of labor income, increasing spatial inequality, and widening inequality in the distribution of wealth. It then provides evidence that the reversal of these drivers, with the exception of wealth inequality, could partly explains the decline in income inequality since 2008. The paper argues that since part of the reversal of these drivers is policy-induced, it is important that the policy actions continue for income inequality to decline further. The paper further argues that a critical factor underlying the Kuznets hypothesis is that taxation and transfers play a bigger role in income redistribution as a country becomes more developed, while their role is still limited in China, the future path of Chinaís income inequality may not be one-directional, and may stay high before personal income tax plays a bigger role.
    Keywords: Income inequality, the Chinese economy, Kuznets hypothesis
    JEL: D31 D63 N35
    Date: 2016–06
  5. By: Wu, Linhai; Hu, Qipeng; Zhu, Dian; Wang, Jianhua
    Abstract: Grain security should be a priority for the Chinese government when managing state affairs. The total rice production needs to remain stable at more than 200 million tons. However, there have been serious rice harvest losses, especially the harvest stage. In this study, the meaning of rice harvest losses was defined based on previous research findings on the definition of grain harvest losses and the realities in China. The current rice harvest losses in different areas in China were analyzed based on sampling survey data from 957 farmers in 10 provinces in China. On this basis, the main factors influencing rice harvest losses and their marginal effects were analyzed using the ordered multinomial logistic model. The survey found that 56.22% of respondents believed that rice harvest losses were 4% or lower in China, though there were differences among the province. The proportion of family rice-farming income, size of production area, level of mechanization, timely harvest, and operational meticulousness had negative effects on rice harvest losses. On the other hand, farmers' experience of employment as migrant workers had a positive effect on rice harvest losses. In addition, bad weather and short handedness during harvest significantly increased rice harvest losses.
    Keywords: rice, harvest losses, ordered multinomial logistic model, marginal effect, Agricultural and Food Policy, Q18,
    Date: 2016–04
  6. By: Yating, Zeng; Yanhong, Jin; Zhong, Tang
    Abstract: China maintains a steady yield increase in the past three decades, but farm production is undergoing a great change, especially in the recent decade, due to the change in both economic conditions and the environment along with a sharp decline of rural labor and farming population. Agricultural mechanization, especially agricultural mechanization services (AMS), gains its popularity in recent years. This study examines the adoption of agricultural mechanization, using either self-equipped machinery or AMS; and the factors contributing to the adoption of different types of agricultural mechanization. The empirical analysis uses primary survey data and employs a seemingly unrelated regression model. We find that the agricultural labor endowment improves the adoption of agricultural mechanization, but off-farm labor curbs the adoption. In terms of the land endowment, we find an inverse U-shaped non-linear relationship between the land endowment and the AMS adoption, and land fragmentation reduces the mechanization adoption.
    Keywords: Labor, Land Endowment, Mechanization of Agricultural Production, Agricultural Machinery Service (AMS), Farm Management, Labor and Human Capital, Land Economics/Use, Production Economics,
    Date: 2016
  7. By: Tang, Can (Renmin University of China); Zhao, Liqiu (Renmin University of China); Zhao, Zhong (Renmin University of China)
    Abstract: We present the first systematic study on child labor in China. Child labor is not a negligible social phenomenon in China; about 7.74% of children aged from 10 to 15 were working in 2010, and they worked for 6.75 hours per day on average, and spent 6.42 hours less per day on study than other children. About 90% of child laborers were still in school and combined economic activity with schooling. Our results show that child labor participation is positively associated with school dropout rate. A child living in a rural area is more likely to work. Compared with place of residence, the gender of a child are less important. The educational level of the household head and its interaction with the gender of the household head seem to be unimportant. However, household assets per capita and household involvement in non-agricultural activities are negatively related to the incidence of child labor. A child from a household with more adults is less likely to work. The prevalence of child labor in China exhibits significant regional variations. The child labor incidence is correlated with the development level of each region: the Western region has the highest percentage of child labor, followed by the Eastern and Central region.
    Keywords: child labor, school dropout, working hours, China
    JEL: J43 J81 O15
    Date: 2016–05
  8. By: Liang, Wenquan (Asian Development Bank Institute); Lu, Ming (Asian Development Bank Institute)
    Abstract: In cities, complementarity between a low-skilled and a high-skilled workforce can promote each other to improve labor productivity. In this study, we used earlier census data and 1% population survey data to examine the distribution of the skilled workforce in cities in the People’s Republic of China (PRC) along with its changes, and drew the following three conclusions. First, a highly skilled workforce is the engine of urban development, increasing urban wages and population. Second, big cities can promote complementarity between skill sets so that there are greater numbers of high-skilled and low-skilled workers in those cities. This explains why both low-skilled and high-skilled workforces agglomerate in big cities. Last, complementarity between the low-skilled and high-skilled workforce is inhibited in the PRC’s cities because of the biased household registration system (HRS) toward the high-skilled workforce, resulting in limited supply of low-skilled labor. This policy is not conducive to enhance labor productivity in big cities and to carry out its leading role of economic growth.
    Keywords: People’s Republic of China; urbanization; urban development; urban system; city; skill complementarities; skill composition; labor productivity; workforce; economic growth; household registration system; human capital; household income; wages; industrialization; education
    JEL: J24 J61 R12
    Date: 2016–06–20

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