Access to imported intermediates and intra-firm wage inequality / Ying Ge (Zhejiang University), Tony Fang (Hefei University, Memorial University of Newfoundland and IZA), Yeheng Jiang (Research Institute of Forestry Policy and Information and Chinese Academy of Forestry) ; IZA Institute of Labor Economics
VerfasserGe, Ying ; Fang, Tony ; Jiang, Yeheng
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, March 2019
Elektronische Ressource
Umfang1 Online-Ressource (42 Seiten)
SerieDiscussion paper ; no. 12246
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Access to imported intermediates and intra-firm wage inequality [0.46 mb]
Verfügbarkeit In meiner Bibliothek
Zusammenfassung (Englisch)

We use Chinese firm-level data from the World Bank Investment Climate Survey to examine the link between importing intermediates and intra-firm wage inequality. Our results show that intermediate input importers not only have a significant wage premium but also have a greater intra-firm wage dispersion than non-importing firms. This pattern is robust when we control for productivity and use trade costs as the instruments. We further investigate the mechanism of how importing intermediates might contribute to both inter-firm and intra-firm wage inequality. Our evidence is consistent with three important channels. First, imported intermediate inputs complement skilled labour. Second, intermediates importers are more likely to use performance pay. Third, imported inputs complement innovation and employee training.

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