Market access and individual wages: Evidence from China

Laura Hering, S Poncet

Research output: Contribution to journalArticleAcademicpeer-review

96 Citations (Scopus)

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.
Original languageEnglish
Pages (from-to)145-159
Number of pages15
JournalThe Review of Economics and Statistics
Volume92
Issue number1
DOIs
Publication statusPublished - 2010

Research programs

  • EUR ESE 37

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