Are profits shared with workers in China’s factories?

By Wenjing Duan and Prof. Pedro S. Martins

China’s recent emergence in the world economy was underpinned by a massive process of labour reallocation delivered by the country’s nascent labour market. After several decades in which labour was allocated and rewarded centrally, according to communist principles, a number of market-oriented reforms led to greater flexibility and responsiveness to demand and supply. Given the large pool of underemployed workers eager to increase their incomes, in particular in rural areas – over 150 million people according to some estimates –, the potential for growth from industrialisation and exports was considerable.

China Duan Martins

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Political economy and Economic Development: Mobility, Inequality, Stigma and Prosperity.

By Beatriz Rodriguez-Satizabal and Dr. Caterina Gennaioli

What is the political economy of monitoring pollution in China? Should we be using relative or absolute measures of inequality? What are the economic implications of stigma? Have skills and human capital a long term effect on local economic conditions? Is there intergenerational mobility in Africa? Is the millennium missing out in rising prosperity? These were some of the questions raised by CGR and guest researchers during the annual Workshop on Political Economy and Economic Development and during the Annual Globalisation Seminar hosted by the Centre for Globalisation Research on the 9th of November, 2018.

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Brown Bag Seminar | Collateral Damage? Labour Market Effects of Competing with China – at Home and Abroad

On Wednesday 7th of March, Professor Pedro Martins (SBM) will be presenting his research.

Abstract

The increased range and quality of China’s exports is a major ongoing development in the international economy with potentially far-reaching effects, including in labour markets. On top of the direct effects of increased imports from China studied in previous research, in this paper we also examine the indirect labour market effects stemming from increased export competition in third markets. Our evidence, based on matched employer-employee panel data from Portugal covering 1991-2008 period, indicates that workers’ earnings and employment are significantly negatively affected by China’s imports, but essentially only through the indirect, ‘market-stealing’ channel. The results are robust to a number of checks, including an alternative measure of the indirect effects, and are found to be stronger for women, older and less educated workers, and workers in domestic firms.

Cabral, S., Martins, P., dos Santos, J. and Tavares, M. (Feb, 2018)