Technological change and wages in China: Evidence from matched employer-employee data

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Abstract

The relationship between research and development (R D) intensity and wages is examined using a unique matched employer-employee dataset. The ordinary least squares estimates suggest that a one standard deviation increase in R D intensity is associated with an increase in the hourly wage rate between 3.4 and 6.9 for the full sample, depending on the exact specification. The instrumental variable estimates are that a one standard deviation increase in R D intensity is associated with an increase in the hourly wage rate between 5.5 and 11.4 . The wage elasticity with respect to R D intensity is found to be higher in larger firms as well as for better educated workers and workers with technical skills. Consistent with the rent-sharing hypothesis it is also found that the wage elasticity with respect to R D intensity is higher for workers who belong to the Communist Party or union.
Original languageEnglish
Pages (from-to)123 - 138
Number of pages16
JournalReview of Development Economics
Volume18
Issue number1
DOIs
Publication statusPublished - 2014

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