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Journal Articles Review of Economics and Statistics Year : 2010

Market access and individual wages: evidence from China

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Laura Hering
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Sandra Poncet

Abstract

We consider the effect of geography on wages using individual data from 56 Chinese cities. We present a simple new economic geography model that links wages to individual characteristics and market access. The latter is calculated as a transport cost weighted sum of surrounding locations' market capacity. After controlling for individual skills and local factor endowments, we find that a significant fraction of the interindividual differences in returns to labor can be explained by the geography of market access. We further find greater wage sensitivity to market access for highly skilled workers and for workers in private and, particularly, foreign-owned firms.
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hal-00633785 , version 1 (19-10-2011)

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Laura Hering, Sandra Poncet. Market access and individual wages: evidence from China. Review of Economics and Statistics, 2010, 92 (1), pp.145-159. ⟨10.1162/rest.2009.11418⟩. ⟨hal-00633785⟩
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