Lei Li: Skill-biased Imports in China
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Skill-biased Imports in China

Statistics shows that China’s skilled labor share has been increasing from 1995 to 2010, as well as her skilled premium. This seminar, held in Room 710, Fanhai Building, on 22nd, Dec. 2015, had the honor to invite Ms. Lei Li, a PhD candidate of Tsinghua University, to present her latest coauthered work on the relationship between China’s capital import and its skilled labor. Professor Zhao Chen, Professor Xiaohuan Lan, and Dr. Jianfeng Wu with some of the PhD students participated in this seminar.


Although there is uniform evidence for rising skill premium and skilled labor share, the explanations are quite inconsistent. Nevertheless, Ms. Li’s story stated that it was with the skilled-biased capital import increasing that the relative demand for skills has been rising.

Ms. Li took utility of the dataset composed of the Urban Household Survey (1997-2009), the Annual Surveys of Industrial Production (2004), China Statistical Year Book, and the micro data from China Customs (1997-2009).

In her specified empirical model, Ms. Li employed the log value added of a firm as the dependent variable. The independent variables consisted of the capital import intensity, the log value of capital stock, the log employment of skilled workers and the log employment of unskilled workers. Ms. Li proposed exchange rates as IVs for capital equipment imports.

The results reviewed that an increase capital import penetration explained about 46% and 21% of the rising skill premium and human capital accumulation. Hence, Ms. Li concluded that skilled-biased import induced rising demand for skilled labors. “We find that foreign capital goods are skill-augmenting; capital importers have higher labor productivity, pay higher wages, hire more college workers and have higher ratio of capital with respect to labor.” She said.



By SHI Shuo

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