The China syndrome? The impact of China's growth on wage inequality in East Asian economies
Journal
Asia-Pacific Journal of Accounting and Economics
Journal Volume
20
Journal Issue
4
Pages
385-404
Date Issued
2013
Author(s)
Abstract
In this paper, the opening and rapid growth of China is examined for its effects on output, employment, GDP, social welfare, and wage inequality within major East Asian economies like Japan, South Korea, Singapore, Taiwan, and Hong Kong. Simulation results show a tendency toward rising relative real wages between skilled and unskilled workers. However, GDP and social welfare in major East Asian economies have tended to rise with China's openness and growth. Outputs of almost all non-agricultural industries but the moderately human capital (unskilled labor)-intensive manufacturing groups have declined. It seems that income effects from China's growth overpower factor substitution effects, so that a larger China has made all the other economies, and the agents within them, better off. On an elemental level, this stands to reason since China's expansion confers on the rest of the world a large term of trade gain. © 2013 © 2013 City University of Hong Kong and National Taiwan University.
Subjects
China; computable general equilibrium; economic expansion; trade openness; wage inequality
Type
journal article