The effect of outward processing trade on wage inequality : the Hong Kong case
Document Type
Journal article
Source Publication
Journal of International Economics
Publication Date
9-1-2005
Volume
67
Issue
1
First Page
241
Last Page
257
Publisher
Elsevier BV
Keywords
Wage inequality, Outward processing trade, Causality
Abstract
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.
DOI
10.1016/j.jinteco.2004.09.005
Print ISSN
00221996
E-ISSN
18730353
Publisher Statement
Copyright © 2004 Elsevier B.V.
Access to external full text or publisher's version may require subscription.
Full-text Version
Accepted Author Manuscript
Language
English
Recommended Citation
Ho, L. S., Wei, X., & Wong, W. C. G. (2005). The effect of outward processing trade on wage inequality: The Hong Kong case. Journal of International Economics, 67(1), 241-257. doi: 10.1016/j.jinteco.2004.09.005