Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/36886
Authors: 
Liu, Xuejun
Park, Albert
Zhao, Yaohui
Year of Publication: 
2010
Series/Report no.: 
Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 4872
Abstract: 
Although theory predicts that international trade will decrease the relative demand for skilled workers in relatively skill-deficit countries, in recent decades many developing countries have experienced rising wage premiums for skilled workers. We examines this puzzle by quantifying the relative importance of different supply and demand factors in explaining the rapid increase in the returns to education experienced by China during the 1990s. Analyzing Chinese urban household survey and census data for six provinces, we find that although changes in the structure of demand did reduce the demand for skilled workers, consistent with trade theory, the magnitude of the effect was modest and more than offset by institutional reforms and technological changes that increased the relative demand for skill.
Subjects: 
Education
earnings
inequality
China
JEL: 
F16
J24
J31
P23
Document Type: 
Working Paper

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