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Technological Change and Wages in China: Evidence from Matched Employer–Employee Data

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  • Vinod Mishra
  • Russell Smyth
Abstract
The relationship between research and development (R&D) intensity and wages is examined using a unique matched employer–employee dataset. The ordinary least squares estimates suggest that a one standard deviation increase in R&D intensity is associated with an increase in the hourly wage rate between 3.4% and 6.9% for the full sample, depending on the exact specification. The instrumental variable estimates are that a one standard deviation increase in R&D intensity is associated with an increase in the hourly wage rate between 5.5% and 11.4%. The wage elasticity with respect to R&D intensity is found to be higher in larger firms as well as for better educated workers and workers with technical skills. Consistent with the rent-sharing hypothesis it is also found that the wage elasticity with respect to R&D intensity is higher for workers who belong to the Communist Party or union.

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  • Vinod Mishra & Russell Smyth, 2014. "Technological Change and Wages in China: Evidence from Matched Employer–Employee Data," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 123-138, February.
    • Handle: RePEc:bla:rdevec:v:18:y:2014:i:1:p:123-138
    DOI: 10.1111/rode.12073
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    1. Zagler, Martin & Amighini, Alessia & Fang, Weidi, 2023. "On the evolution of the wage premium for party membership in China," Department of Economics Working Paper Series 351, WU Vienna University of Economics and Business.
    2. 岩﨑, 一郎 & Iwasaki, Ichiro & 馬, 欣欣 & Ma, Xin Xin, 2019. "現代中国における男女賃金格差: メタ分析による接近," Discussion Paper Series 689, Institute of Economic Research, Hitotsubashi University.
    3. Zhou, Yixiao & Tyers, Rod, 2019. "Automation and inequality in China," China Economic Review, Elsevier, vol. 58(C).
    4. Iwasaki, Ichiro & Ma, Xinxin, 2020. "Gender wage gap in China: a large meta-analysis," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 54, pages 1-17.
    5. Yixiao Zhou, 2014. "Role of Institutional Quality in Determining the R&D Investment of Chinese Firms," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 22(4), pages 60-82, July.
    6. Iwasaki, Ichiro & Ma, Xinxin, 2020. "Gender Wage Gap in China: A Large Meta-Analysis," CEI Research Paper Series 2020-5, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    7. Hansa Jain, 2018. "Technological Change, Skill Supply and Wage Distribution: Comparison of High-Technology and Low-Technology Industries in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(2), pages 299-320, June.

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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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