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The Impact of Outsourcing to China on Hong Kong's Labor Market,” September, working paper (1999)
| Citations: | 21 - 0 self |
BibTeX
@MISC{Hsieh99theimpact,
author = {Chang-tai Hsieh and Keong T. Woo},
title = {The Impact of Outsourcing to China on Hong Kong's Labor Market,” September, working paper},
year = {1999}
}
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Abstract
After decades of autarky, China opened its economy to foreign investors in the late 1970s and early 1980s. This paper examines the impact of the resulting outsourcing of production from Hong Kong to China on Hong Kong’s labor market as a quasi-natural experiment to study the impact of globalization and outsourcing on relative wages of less-skilled workers. We document that the relative demand for skilled workers in Hong Kong increased sharply at exactly the same time outsourcing to China began to increase in the early 1980s. We show that rapid skill upgrading within detailed industries in the manufacturing sector accounts for most of the growth in the relative demand for skilled workers, but played a much less important role in the non-manufacturing sector. Using several measures of outsourcing to China, we show that the rate of skill upgrading has been greater in industries that have seen a greater degree of outsourcing to China. These measures of outsourcing account for 45 to 60 percent of the shift in the relative demand for skilled workers.
Keyphrases
hong kong skilled worker relative demand labor market important role relative wage hong kong labor market several measure non-manufacturing sector manufacturing sector account foreign investor rapid skill less-skilled worker late 1970s skill upgrading quasi-natural experiment detailed industry
