Position In Global Value Chain And Skill Premium Of Chinese Industrial Enterprises

With the rise of global value chains,countries/ industries specialize in particular stages of based on their comparative advantages,focusing on certain tasks and activities which are parts of production processes.The elements of production,the value-added created and distribution of trade benefit vary depending on the GVC positioning.Therefore,the industry's positioning in GVC not only affects the distribution of value-added content in final-use between the industry,but also has an impact on the income of primary factors within the industry.In this paper,the WIOD database is used to measure the position of Chinese industries in the global value chain.Besides we use the 2000-2013 Chinese industrial enterprise database,the first national economic census of enterprise data,and the customs database to examine the impact of the position of the global value chain on the income gap between skilled and unskilled workers.This paper consists of five chapters.Chapter 1 is introduction,which introduces background and significance,research content and method,innovation and deficiencies of the research.Chapter 2 summarizes previous literature and theoretical models on global value chains,labor markets and skill premiums.Based on this,combined with the theory of labor market segmentation this section further elaborates on a theoretical model at the enterpriselevel to clear the transmission mechanism between position in global value chain and skill premium.Chapter 3 is the upstreamness index measurement and descriptive analysis.Chapter 4 introduces the econometric model and analyzes the regression results.The paper uses microlevel data to investigate the relationship between the embedded position of the global value chain and the skill premium,and conducts robustness with many econometric methods.Chapter 5 shows the mechanism analysis which is tested from the perspective of technical level heterogeneity and “fair wages”.Besides,we conduct heterogeneity tests from the region-level human capital levels heterogeneity and geographical distribution.Chapter 6 summarizes the conclusions of the paper and discusses relevant policy implications.The main conclusions of this paper are as follows: 1.In the global value chain,firms with downstream positions have a larger wage gap between skilled workers and unskilled workers.After using different indicators and considering endogenous issues,the results remain robust.2.The downstream industry has a higher technical threshold and requires more skilled workers.In the cross-border vertical specialized production process,each stage requires the intermediate products of the previous stage and labor to produce the intermediate products of the next stage.Mistakes occur along the production process.In order to minimize losses and maximize productivity,there are corresponding technical thresholds for each stage in the industry chain.From upstream to downstream of the value chain,the technological thresholds are gradually higher.3.Unbalanced supply and demand of skilled workers in downstream industries and "fair wages" make downstream industries have a greater skill premium than upstream industries.On the one hand,vertical specialized production requires that downstream industries of the value chain have a higher level of technology and hire more skilled workers.In the case of insufficient elasticity of supply of skilled workers,the supply and demand of high-skilled workers in the downstream industry are relatively unbalanced,which increases the skill premium.On the other hand,downstream industries obtain high value-added rates with the human capital of skilled workers,which makes skilled workers obtain more salary.4.The results of the regional grouping regression show: the position in GVC of the industry will have a greater impact on the skill premium in the high-tech area and western area.This is caused by the industrial agglomeration effect and the self-reinforcing effect of vertical specialized production.The policy implication is that in the process of joining the global value chain,China should pay more attention to the problem of widening income gap,and increase investment in human capital.Besides China should encourage high-tech industries to deeply integrated into the GVCs,maintain and further increase their technology intensity,and avoid the risks of “low-end lock-in” in upstream industries.