TY - JOUR
T1 - The effect of outward processing trade on wage inequality : the Hong Kong case
AU - HO, Lok Sang
AU - WEI, Xiangdong
AU - WONG, Wai Chung, Gary
PY - 2005/9/1
Y1 - 2005/9/1
N2 - This study uses time series analysis to investigate the impact of Hong Kong's increased outward processing trade with the Chinese Mainland on wage inequality. We found a significant positive association between outward processing trade and the wage premium of university graduates over primary school graduates and that over secondary school graduates. Moreover, a standard test showed one-way causality from outward processing trade to the widening of skill wage gap. Furthermore, the increase of outward processing trade is found to both increase the pay for well-educated people and decrease the pay for less well-educated people, thereby widening the wage gap.
AB - This study uses time series analysis to investigate the impact of Hong Kong's increased outward processing trade with the Chinese Mainland on wage inequality. We found a significant positive association between outward processing trade and the wage premium of university graduates over primary school graduates and that over secondary school graduates. Moreover, a standard test showed one-way causality from outward processing trade to the widening of skill wage gap. Furthermore, the increase of outward processing trade is found to both increase the pay for well-educated people and decrease the pay for less well-educated people, thereby widening the wage gap.
KW - Causality
KW - Outward processing trade
KW - Wage inequality
UR - http://www.ln.edu.hk/econ/staff/xdwei/docs/hkecon/HKtradeandwage2006.pdf
UR - http://commons.ln.edu.hk/sw_master/376
U2 - 10.1016/j.jinteco.2004.09.005
DO - 10.1016/j.jinteco.2004.09.005
M3 - Journal Article (refereed)
SN - 0022-1996
VL - 67
SP - 241
EP - 257
JO - Journal of International Economics
JF - Journal of International Economics
IS - 1
ER -