| How trade will affect income distribution has always been a vital and heated issue in international trade and labor economics.Especially in recent years,the prevalence of populism has set off the trend of “anti-globalization” around the world,which makes people reconsider the increasing income inequality among and within countries caused by economic globalization.Since the reform and opening up,China has rapidly integrated into the global-value-chain with the comparative advantage of labor,and has become the world's largest exporter and second largest importer.However,at the same time,China's income inequality has also been getting worse,with the Gini coefficient above 0.4 for many years.With the signing of the Regional Comprehensive Economic Partnership and the EU-China Comprehensive Agreement on Investment in 2020,China is becoming a staunch force for economic globalization and multilateralism,China's opening up will continue and get wider.Therefore,whether China's increasing trade liberalization will aggravate its income inequality,especially wage inequality,becomes significant both theoretically and practically.This thesis reviews the theories related to trade liberalization and wage inequality,and decomposes enterprise wage inequality into cross-group wage inequality,within-group wage inequality and firm's skill premium.Based on the research of Egger and Kreickemeier(2009),this thesis sets up a complete theoretical model which explains the mechanism of trade liberalization's impact on enterprise wage inequality.Then,it outlines the development and current situation of trade liberalization and wage inequality in China by referring to the WITS database of the World Bank,China Statistical Yearbook,China Labor Statistical Yearbook and other relevant data.Finally,by using the combined data of Chinese firm-level production data and product-level trade data,this thesis empirically tests the impact of trade liberalization on enterprise wage inequality.Based on the empirical results,it draws conclusions and comes up with some policy recommendations.The main conclusions of this thesis are as follows:Firstly,trade liberalization has reduced cross-group wage inequality.An open trade results in such inequality between export firms and domestic firms,while the improvement of trade liberalization will narrow the gap in critical productivity of firms entering domestic and those entering international markets,and thus reduces cross-group wage inequality.The conclusion is empirically tested by building a moderation-effect model,which proves not obvious in the central and western regions of China and high-tech industries.After endogeneity treatment,index replacement and supplementary sample analysis,the empirical results are still solid.Secondly,trade liberalization reduces the within-group wage inequality of all enterprises.Specifically,it reduces the domestic firms' within-group wage inequality and increases the export firms' within-group wage inequality.Trade liberalization will improve firms' average productivity and critical productivity of entering the domestic market,but the gap between them will narrow with the increasing degree of trade liberalization,reducing the within-group wage inequality.Specifically,trade liberalization will narrow the critical productivity gap between firms' entering domestic market and those entering international market,narrowing the within-group wage inequality of domestic enterprises.However,the impact of trade liberalization on export firms' within-group wage inequality is influenced by specific domestic parameters,which needs to be determined by empirical analysis.It shows through empirical tests by aggregating the enterprise data to province-industry data that China's trade liberalization narrowed firms' within-group wage inequality.Further analysis reveals that trade liberalization narrows domestic firms' within-group wage inequality and enlarges the export firms' within-group wage inequality.The empirical results do not show regional heterogeneity but are not obvious for high-tech industries.Subsequent endogenic treatment,index substitution,and supplemental sample testing do not change the results.Thirdly,trade liberalization widens firms' skill premium.By introducing the difference of “bargaining power” between skilled and unskilled workers,it shows that trade liberalization will improve the average productivity and average profit of all firms and enlarge firms' skill premium because skilled workers have greater bargaining power than unskilled ones.The firms' unbalanced panel data are built to contain the entry and exit of firms.And the skill premium is recalculated with the weight of the technical structural change in the industry.The empirical results show that trade liberalization will expand firms' skill premium.They show no regional heterogeneity but they are still not obvious in high-tech industries.After endogeneity treatment,index replacement and supplementary sample analysis,the empirical results are solid.Fourthly,there is an intrinsic mechanism mediated by enterprise profit underlying the impact of trade liberalization on firms' wage inequality.Trade liberalization will affect the critical productivity of enterprises entering the domestic and international markets and then affect the enterprises' profit,which is finally reflected in the change of firms' wages.With the help of mediation model,it is found that trade liberalization can significantly improve enterprises' profit,which will increase firms' wage inequality,with obvious mediating effect.But the mediation effect is weaker than the direct effect of trade liberalization on firms' wage inequality,thus unable to change the total effect.The main contributions of this essay are as follows: First of all,concerning the perspectives of the study,the dynamic effect of trade liberalization on firms' within-group wage inequality is further studied by building a moderation-effect model.The effects of trade liberalization on domestic firms' within-group wage inequality are investigated.The perspective is extended to within the enterprises and the effects of trade liberalization on firms' skill-premium are studied.Secondly,a complete and comprehensive theoretical model is built which is bade on the E-K model,and an analysis of the effect of trade liberalization on firm's cross-group wage inequality,within-group wage inequality and skill-premium is done.Thirdly,as to endogeneity,“the number of customs ports” is selected to be an instrumental variable.On the other hand,based on Qiu Bin and Yan Zhijun's study(2015),China's average export duties of all industries are calculated according to the customs duty rate of China's ten main export destinations on Chinese exports.The potential endogenous problems are resolved by applying a more exogenous indicator. |
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