Opening of China's Trade, Labour Market Reform and Impact on Rural Wages

17 Pages Posted: 3 Jul 2005

See all articles by Colin A. Carter

Colin A. Carter

University of California, Davis - Department of Agricultural and Resource Economics

Andrew J. Estrin

Government of the United States of America - Center for Food Safety and Nutrition (CFSAN)

Abstract

Government policy in China supports urban wages at the expense of returns to farm labour. A model is developed to estimate how WTO accession and complementary labour market reform will influence factor returns in China. With WTO membership, a larger cut in manufacturing tariffs compared to agriculture will improve agriculture's terms of trade and will raise the agricultural wage. Complementary labour market reforms will further boost farm wages as labour exits agriculture in large numbers. We estimate that WTO membership and complementary labour market reforms will result in a decline in the agricultural labour force by about 25 per cent.

Suggested Citation

Carter, Colin A. and Estrin, Andrew J., Opening of China's Trade, Labour Market Reform and Impact on Rural Wages. The World Economy, Vol. 28, No. 6 pp. 823-839, June 2005. Available at SSRN: https://ssrn.com/abstract=741823

Colin A. Carter (Contact Author)

University of California, Davis - Department of Agricultural and Resource Economics ( email )

One Shields Avenue
Davis, CA 95616
United States

Andrew J. Estrin

Government of the United States of America - Center for Food Safety and Nutrition (CFSAN) ( email )

Washington, DC
United States
301-436-1829 (Phone)
301-436-2626 (Fax)

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