nep-cna New Economics Papers
on China
Issue of 2016‒07‒09
fifteen papers chosen by
Zheng Fang
Ohio State University

  1. Valuing Air Quality Using Happiness Data: The Case of China By Zhang, Xin; Zhang, Xiaobo; Chen, Xi
  2. Saving and Bequest in China: An Analysis of Intergenerational Exchange. By Almås, Ingvild; Freddi, Eleonora; Thøgersen, Øystein
  3. Chinese aid and local corruption By Isaksson, Ann-Sofie; Kotsadam, Andreas
  4. Anticorruption and Growth: Evidence from China By Qu, Guangjun; Sylwester, Kevin; Wang, Feng
  5. Parental Unemployment and Child Health in China By Pieters, Janneke; Rawlings, Samantha
  6. Ability tracking and social capital in China's rural secondary school system By Fan Li; Prashant Loyalka; Hongmei Yi; Yaojiang Shi; Natalie Johnson; Scott Rozelle
  7. Old-Age Pension and Extended Families: How is Adult Children's Internal Migration Affected? By Chen, Xi
  8. Agglomeration and Technological Spillovers: Firm-Level Evidence from China's Electric Apparatus Industry By He, Ming; Chen, Yang; Schramm, Ronald M.
  9. Rebound effect of improved energy efficiency for different energy types: A general equilibrium analysis for China By Yingying Lu; Yu Liu; Meifang Zhou
  10. The Effect of Pollution on Worker Productivity: Evidence from Call-Center Workers in China By Chang, Tom; Graff Zivin, Joshua; Gross, Tal; Neidell, Matthew
  11. Economic Growth in China and Its Potential Impact on Australia-China Bilateral Trade By Yu Sheng
  12. Could mexico become the new ‘China'?: Policy drivers of competitiveness and productivity By Sean Dougherty; Octavio Escobar
  13. Export Destination, Skill Utilization and Skill Premium in Chinese Manufacturing sector By Khan, Bilal M.; Xia, Junjie
  14. Monetary Expressions of Labor Time and Market Prices: Theory and Evidence from China, Japan and Korea By Tsoulfidis, Lefteris; Paitaridis, Dimitris
  15. The evolution of Tibetan representation and preferentiality in public employment during the Post-fenpei period in China: Insights from new data sources By Fischer, A.M.; Zenz, A.

  1. By: Zhang, Xin (Peking University); Zhang, Xiaobo (Peking University); Chen, Xi (Yale University)
    Abstract: This paper estimates the monetary value of cutting PM2.5, a dominant source of air pollution in China. By matching hedonic happiness in a nationally representative survey with daily air quality data according to exact dates and locations of interviews in China, we are able to estimate the relationship between local concentration of particulate matter and individual happiness. By holding happiness constant, we calculate the tradeoff between the reduction in particulate matter and income, essentially a happiness-based measure of willingness-to-pay for mitigating air pollution. We find that people on average are willing to pay ¥539 ($88, or 3.8% of annual household per capita income) for a 1 μg/m3 reduction in PM2.5 per year per person.
    Keywords: willingness to pay, hedonic happiness, air pollution, China
    JEL: Q51 Q53 I31
    Date: 2016–06
  2. By: Almås, Ingvild (Stockholm University and NHH); Freddi, Eleonora (Stockholm School of Economics); Thøgersen, Øystein (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Particularly high saving rates among the elderly in both rural and urban China call for an investigation of the involved bequest motive. Utilizing unique survey data from a diverse group of Chinese households, we document that the magnitude of the bequest from parent to child is synchronized with the level of personal assistance from child to parent. Moreover, both bequest and assistance are increasing in the parent's income and decreasing in the child's income. Comparing with the prediction from a stylized overlapping generations model, these ndings are consistent with an exchange-based bequest motive. This conclusion has implications for how public policies and transfer schemes may be designed in order to contribute to the government objective of increased private consumption. Our results indicate that an important driver for our result is the housing wealth as part of the bequest.
    Keywords: equest; intergenerational exchange; housing wealth; Chinese saving.
    JEL: D14 D64 E21
    Date: 2016–06–27
  3. By: Isaksson, Ann-Sofie (Department of Economics, School of Business, Economics and Law, Göteborg University); Kotsadam, Andreas (Ragnar Frisch Centre for Economic Research. Oslo, Norway)
    Abstract: Considering the mounting criticisms concerning Chinese aid practices, the present paper investigates whether Chinese aid projects fuel local-level corruption in Africa. To this end, we geographically match a new geo-referenced dataset on the subnational allocation of Chinese development finance projects to Africa over the 2000-2012 period with 98,449 respondents from four Afrobarometer survey waves across 29 African countries. By comparing the corruption experiences of individuals who live near a site where a Chinese project is being implemented at the time of the interview to those of individuals living close to a site where a Chinese project will be initiated but where implementation had not yet started at the time of the interview, we control for unobservable time-invariant characteristics that may influence the selection of project sites. The empirical results consistently indicate more widespread local corruption around active Chinese project sites. The effect, which lingers after the project implementation period, is seemingly not driven by an increase in economic activity, but rather seems to signify that the Chinese presence impacts local institutions. Moreover, China stands out from the World Bank and Western bilateral donors in this respect. In particular, whereas the results indicate that Chinese aid projects fuel local corruption but have no observable impact on local economic activity, they suggest that World Bank aid projects stimulate local economic activity without fuelling local corruption.
    Keywords: China; aid; local corruption; Africa
    JEL: D73 F35 O10 O55
    Date: 2016–06
  4. By: Qu, Guangjun; Sylwester, Kevin; Wang, Feng
    Abstract: Many studies have examined corruption’s effect upon economic growth. This study takes a different approach and investigates whether anticorruption campaigns might also lower economic growth, at least in the short run. We focus upon the anticorruption campaigns run by the Communist Party of China in recent years. To measure the intensity of the Party’s anticorruption efforts, we count the number of articles from official newspapers that discuss corruption or anticorruption policies. These official Chinese newspapers are controlled by the Party as its mouthpieces and the inclusion of articles and editorials in these papers only appear with official approval. Therefore, the frequency of corruption and anticorruption articles within these papers provides information for how seriously the Party views corruption and how strenuously the Party is fighting it. We first analyze the patterns of the anticorruption campaigns across provinces and over time while also comparing our measure with other measures of corruption and anticorruption. Using data from Chinese provinces, we then estimate the effect of anticorruption upon economic growth. We employ fixed effects models and find a negative effect from anticorruption upon economic growth. Concerned that economic growth could impact the intensity of anticorruption campaigns, we utilize dynamic GMM estimation methodologies and also propose an external instrument for our anticorruption proxy. Results remained robust. Finally, we measure the effects of anticorruption not by our newspaper proxies but by looking at growth effects during and after the sentencing of high ranking government officials on corruption charges. Economic growth is once again found to be lower. Moreover, this negative effect appears to last for two years. Our findings do not imply that governments should not try to lower corruption, but do suggest a cost of doing so.
    Keywords: Anticorruption; Official Newspapers; China; Corruption; Growth
    JEL: H11 K42 O11 O43
    Date: 2016–03–02
  5. By: Pieters, Janneke (Wageningen University); Rawlings, Samantha (University of Reading)
    Abstract: This paper studies the causal effect of maternal and paternal unemployment on child health in China, analyzing panel data for the period 1997-2004, when the country underwent economic reforms leading to massive layoffs. We find that paternal unemployment reduces child health, while maternal unemployment has beneficial child health impacts. Analysis of channels shows that paternal and maternal unemployment have different effects on income, time use, mothers' blood pressure, and certain health investments, including children's diets. Our results support the notion that traditional gender roles can explain why mothers and fathers' unemployment affect child health so differently.
    Keywords: child health, unemployment, nutrition, China
    JEL: I12 J13 J69 O15
    Date: 2016–06
  6. By: Fan Li; Prashant Loyalka; Hongmei Yi; Yaojiang Shi; Natalie Johnson; Scott Rozelle
    Abstract: The goal of this paper is describe and analyze the relationship between ability tracking and student social capital, in the context of poor students in developing countries. Drawing on the results from a longitudinal study among 1,436 poor students across 132 schools in rural China, we find a significant lack of interpersonal trust and confidence in public institutions among poor rural young adults. We also find that there is a strong correlation between ability tracking during junior high school and levels of social capital. The disparities might serve to further widen the gap between the relatively privileged students who are staying in school and the less privileged students who are dropping out of school. This result suggests that making high school accessible to more students would improve social capital in the general population.
    Keywords: ability tracking, social capital, interpersonal trust, confidence in public institutions, rural secondary schooling
    Date: 2016–06
  7. By: Chen, Xi (Yale University)
    Abstract: This paper makes use of the most recent social pension reform in rural China to examine whether receipt of the pension payment equips adult children of pensioners to migrate. Employing a regression discontinuity (hereafter RD) design to a primary longitudinal survey, this paper overcomes challenges in the literature that households eligible for pension payment might be systematically different from ineligible households and that it is difficult to separate the effect of pension from that of age or cohort heterogeneity. Around the pension eligibility age cut-off, results reveal large and significant increase among adult sons (but not daughters) to migrate out of their home county. Meanwhile, adult children are more likely to migrate out if their parents are healthy. Our Fuzzy RD estimations survive a standard set of key placebo tests and robustness checks.
    Keywords: rural pension, RD Design, adult children, migration
    JEL: H55 I38 J14 J22
    Date: 2016–06
  8. By: He, Ming (Division of Economics, Xi'an Jiaotong-Liverpool University); Chen, Yang (Division of Economics, Xi'an Jiaotong-Liverpool University); Schramm, Ronald M. (Division of Economics, Xi'an Jiaotong-Liverpool University)
    Abstract: We use a spatial autoregressive model to study the determinants of firm-level productivity growth using longitudinal data on China's electric apparatus industry over the period of 1999-2007. Factors considered include technological spillover, R&D and export behavior, agglomeration economies, and public expenditure. We propose modifications to Kelejian and Prucha's (1998) FE-2SLS procedure and Mutl and Pfaffermayr's (2011) RE-FG2SLS procedure to cope with the technical difficulties with our unbalanced panel. Statistical evidence strongly favors the fixed effects model over the random effects model. According to our estimates, there are large and signiffcant technological spillovers among firms. Individually, firms benefit from their own R&D and export activities. Market competition and public expenditure in the local and neighboring jurisdictions are found to be important determinants to productivity. Our model also provides direct evidence that the technological spillover effects attenuate rapidly in spatial distance. Finally, the inter-regional spillover effects are found to be more pronounced and more significant on urban districts or jurisdictions with smaller geographical areas. Geographic proximity to neighbors and special administrative role jointly contribute to this observation.
    Date: 2016–03–03
  9. By: Yingying Lu; Yu Liu; Meifang Zhou
    Abstract: This paper explores the rebound effect of different energy types in China based on a static computable general equilibrium model. A one-off 5% energy efficiency improvement of using five different types of energy is imposed, respectively, in all the 135 production sectors in China. The rebound effect is measured both on the production level and on the economy-wide level by each type of energy. The results show that improving energy efficiency of using electricity has the largest positive impact on GDP among the five energy types. Inter-fuel substitutability does not affect the macroeconomic results significantly, but long-run impact is usually greater than the short-run impact. For those exports-oriented sectors, the capital-intensive sectors get big negative shock in the short run while the labor-intensive sectors get hurt in the long run. There is no “backfire” effect; however, improving efficiency of using electricity can cause negative rebound, which implies that improving the energy efficiency of using electricity might be a good policy choice under China’s current energy structure. In general, macro-level rebound is larger than production-level rebound. Primary energy goods show larger rebound effect than secondary energy goods. In addition, the paper points out that the policy makers in China should look at the rebound effect in the long term rather in the short term. The energy efficiency policy would still be a good and effective policy choice for energy conservation in China who has small inter-fuel substitution in that higher inter-fuel substitution may lead to larger rebound effect.
    Keywords: Rebound Effect, Energy Efficiency Policy, China, CGE Model
    JEL: Q43 Q48 C68
    Date: 2016–06
  10. By: Chang, Tom (University of Southern California); Graff Zivin, Joshua (University of California, San Diego); Gross, Tal (Columbia University); Neidell, Matthew (Columbia University)
    Abstract: We investigate the effect of pollution on worker productivity in the service sector by focusing on two call centers in China. Using precise measures of each worker's daily output linked to daily measures of pollution and meteorology, we find that higher levels of air pollution decrease worker productivity by reducing the number of calls that workers complete each day. These results manifest themselves at commonly found levels of pollution in major cities throughout the developing and developed world, suggesting that these types of effects are likely to apply broadly. When decomposing these effects, we find that the decreases in productivity are explained by increases in time spent on breaks rather than the duration of phone calls. To our knowledge, this is the first study to demonstrate that the negative impacts of pollution on productivity extend beyond physically demanding tasks to indoor, white-collar work.
    Keywords: pollution, productivity
    JEL: J22 J24 Q51 Q53
    Date: 2016–06
  11. By: Yu Sheng (Crawford School of Public Policy)
    Abstract: This paper uses the GTAP Static model to predict the potential impact of economic growth in China on bilateral trade between China and Australia in 2025, under three different scenarios representing the business-as-usual, the successful reform and the stagnation cases respectively. The results show that exports from Australia to China will continue to increase in both absolute and relative terms, irrespective of which economic growth path China takes, partly due to the strong complementary relationship of production between the two countries. The results also indicate that education service exports will become a new engine of bilateral trade in addition to agricultural and mineral products. Furthermore, comparing the results obtained from the three scenarios shows how successful reform will bring more benefits to both China and Australia in trade, which provides useful insights for policy making to facilitate bilateral economic relationship.
    JEL: E17 F17 F43
    Date: 2016–06
  12. By: Sean Dougherty; Octavio Escobar
    Abstract: Over the last decade, Mexico’s unit labour costs decreased relative to other emerging markets’, especially compared to China’s. This decrease boosted Mexico’s trade competitiveness, particularly in the manufacturing sector. However, Mexico’s increasing competitiveness masks one of the country’s fundamental concerns, which is the absence of productivity improvements. The aim of this paper is two-fold: first, we examine the evolution of total factor productivity in Mexico’s manufacturing sector, as compared to China’s. Firm-level data is employed to analyse the distribution and characteristics of productivity across Mexico’s regions. Second, using regional data for the period 2005–2012, we study the policy impediments behind sluggish productivity improvements, particularly to determine how labour informality may have contributed. The study takes advantage of Mexico’s heterogeneity across regions in terms of productivity, market regulation, financial constraints and firm size to identify economic policies that can help to boost productivity in the future. Le Mexique en phase de devenir la nouvelle Chine ? : Déterminants institutionnels de la compétitivité et de la productivité Au cours de la dernière décennie, les coûts unitaires du travail du Mexique ont diminué par rapport aux autres économies émergentes, en particulier par rapport à la Chine. Cette baisse a stimulé la compétitivité commerciale du Mexique, essentiellement dans le secteur manufacturier. Cependant, l’amélioration de la compétitivité semble masquer le principal problème mexicain, à savoir que cette dernière n’est pas accompagnée d’augmentation de la productivité. L’objectif de cet article est double: d'abord, nous examinons l'évolution de la productivité totale des facteurs dans le secteur manufacturier du Mexique, en comparaison avec la Chine. Les données utilisées sont recueillies au niveau des firmes, afin de pouvoir analyser la répartition et les caractéristiques de la productivité à travers les régions mexicaines. Deuxièmement, en utilisant les données régionales pour la période 2005–2012, nous étudions les obstacles politiques qui ont conduit à une stagnation de la productivité, en particulier pour déterminer dans quelle mesure l'informalité du travail pourrait y avoir contribué. Afin d’identifier les politiques économiques susceptibles de stimuler la productivité dans l'avenir, l'étude tire parti de l'hétérogénéité régionale en termes de productivité, du cadre réglementaire, des contraintes financières et de la taille des entreprises.
    Keywords: productivity, micro data, informality, allocative efficiency, sub-national policy analysis, productivité, micro-données, informalité
    JEL: E26 L25 O17 O43 O54
    Date: 2016–07–07
  13. By: Khan, Bilal M.; Xia, Junjie
    Abstract: This paper analyzes the link between export destination, skill utilization and skill premium. We develop the mechanism behind these links: the difference in quality valuation of the product across exporting destinations and the distribution of level of skill among the skilled workers in the labor market. Theory suggest that the consumers in the high income countries value the quality of the same product more than their counterparts in middle or low income countries. To produce a higher quality product, a firm needs not only more skilled workers but also higher quality skilled workers. To attract and keep the higher quality worker, firm needs to incentivize her by providing higher wage as compared to the firms that would be exporting to middle or low income countries. We test this theory using cross-section of more than 160,000 single product Chinese Manufacturing firms survey data, of which nearly 22,000 are exporting to more than 200 countries across the world. We find that firms exporting to high income countries pay higher average wages, hire more skilled workers, defined by education level, and pay higher skill premium as compared to firms exporting to middle or low income countries or selling domestically. Similar to the recent literature, we also didn’t find the impact of exporting per se on the proportion of skilled workers or the skill premium in the firm.
    Keywords: China, Manufacturing firms, Exports, Export destination, labor productivity, wages, Firm heterogeneity, Trade
    JEL: F1 F14 F16 J24 L60 O14 O19
    Date: 2016–05–15
  14. By: Tsoulfidis, Lefteris; Paitaridis, Dimitris
    Abstract: This paper presents estimates of labor values and prices of production following two approaches: The first, based on the classical and Marxian theory of value and distribution; while, the second is based on the so-called new solution to the transformation problem and its variant the Temporary Single-System Interpretation (TSSI). The major advantage of the latter approach is its simplicity along with the relatively low data requirements. Our empirical findings from the economies of China, Japan and South Korea suggest that both approaches give estimates of labor values and prices of production which are extremely close to each other as well as to actual market prices. On further examination, however, we conclude that our empirical findings are absolutely consistent with the theoretical requirements of the classical approach and contradict those of the TSSI.
    Keywords: Marxian theory, labor theory of value, TSSI, vertical integration
    JEL: B00 B14 B16 B3 B5 B51 C67 D30 D4
    Date: 2016–06–25
  15. By: Fischer, A.M.; Zenz, A.
    Abstract: This paper exploits a new and exciting source of data on public employment recruitment in order to analyse the evolution of Tibetan representation and preferential hiring practices in public employment in all Tibetan areas from 2007 to 2015. Despite the limitations of these data, they provide a far more substantiated understanding of recent conditions than currently exists in the literature, even in the Chinese literature. Several major insights can be made from scrutinizing these data. First, following the retrenchment in public employment in the early 2000s and then the ending of the job placement system (Ch. fenpei), there was a strong increase in public employment recruitment from 2011 onwards. Second, Tibetan representation within the recruitment did not collapse, although it lagged significantly; within our sample of outcome documents, Tibetans were underrepresented in the recruitments across all Tibetan areas from 2007 to 2015, without any apparent regional or temporal patterns, at an average of 83 percent of what would be parity with their population share. More information is also needed on the ethnic composition of people exiting from public employment in order to have a more holistic evaluation of the evolution of Tibetan representation. Nonetheless, despite underrepresentation, new recruitment from 2011 onwards employed a much larger share of the university-aged population than during the late fenpei period, thereby reasserting the role of the state as predominant employment provider for educated Tibetan millennials. Practices of preferentiality appear to significantly bolster representation, although they exhibited distinct temporal and regional variations. Language or Tibetan medium degree type requirements were generally on the decline (especially in the TAR and Gannan, where their use became very marginal), with the exception of the Amdo region in Qinghai. Conversely, the use of residency requirements across all Tibetan regions has emerged as a significant form of practicing preferentiality in public employment, especially in the Tibet Autonomous Region (TAR), where all public sector recruitments specify local ‘origin’ (Ch. shengyuan) since at least 2007. The TAR also reintroduced employment guarantees for all local university graduates in 2011, in what we call the innovation of a neo-fenpei system. The decline in the use of linguistic requirements suggests the continuation and entrenchment of assimilationist trends in education and employment policies, and a lack of priority for Tibetan medium education more generally (with the exception of the Amdo region in Qinghai). However, the stable and in some cases increasing use of residency requirements, especially in civil service positions suggests a trend of local level protectionism in public employment, probably led by local governments.
    Keywords: Tibet, China, public employment recruitment and reforms, ethnic representation, preferentiality and positive discrimination, language
    Date: 2016–06–13

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