Publications:
Estimating the earnings returns to exam-measured unobserved ability in China's urban labor market: Evidence for 2002-2013. (2019) China Economic Review, Vol. 53, February 2019, p. 180-190.
Journal article link
Preprint available at here.
China's education system uses exams to measure students' ability. How does the labor market reward the ability that raises exam scores? This paper uses proxies to estimate the labor market returns to ‘exam ability’ in China. The estimated returns to one standard deviation of the ‘exam ability’ are 8% in 2002, 12% in 2007, and 7% in 2013 for the urban population with local hukou and high school and above education. The exam ability explains more wage variation than years of schooling or the level of education degree. There is still a significant amount of unexplained wage variation. It is possible that there are more important labor market skills that are not captured by schooling and exam scores.
Journal article link
Preprint available at here.
China's education system uses exams to measure students' ability. How does the labor market reward the ability that raises exam scores? This paper uses proxies to estimate the labor market returns to ‘exam ability’ in China. The estimated returns to one standard deviation of the ‘exam ability’ are 8% in 2002, 12% in 2007, and 7% in 2013 for the urban population with local hukou and high school and above education. The exam ability explains more wage variation than years of schooling or the level of education degree. There is still a significant amount of unexplained wage variation. It is possible that there are more important labor market skills that are not captured by schooling and exam scores.
Explaining the state-owned enterprise wage premium in China: is it unobserved heterogeneity? (2018) Economic and Political Studies, Vol. 6, No. 2, p. 135-157.
Journal article link
Preprint available here.
State-owned enterprises (SOEs) in China pay higher wages than private firms. Is it because SOEs pay their workers wage premium or because they employ high-quality workforce? Using the latest methods and data, this paper accounts for the unobserved heterogeneity and estimates the SOE wage premium for the period 1995–2013. It is found that the wage premium has diminished since 1995 and has become insignificant since 2000. The significant wage gap between SOEs and non-SOEs can be explained by the fact that SOEs recruit high-quality workforce in correlation with SOEs’ industrial composition. This paper also evaluates the instruments used in the previous studies and rejects them through validity tests. The evidence suggests that the labour market in China is not segmented by ownership.
Journal article link
Preprint available here.
State-owned enterprises (SOEs) in China pay higher wages than private firms. Is it because SOEs pay their workers wage premium or because they employ high-quality workforce? Using the latest methods and data, this paper accounts for the unobserved heterogeneity and estimates the SOE wage premium for the period 1995–2013. It is found that the wage premium has diminished since 1995 and has become insignificant since 2000. The significant wage gap between SOEs and non-SOEs can be explained by the fact that SOEs recruit high-quality workforce in correlation with SOEs’ industrial composition. This paper also evaluates the instruments used in the previous studies and rejects them through validity tests. The evidence suggests that the labour market in China is not segmented by ownership.
Industry-level econometric estimates of energy-capital-labor substitution with a nested CES production function (2015) Atlantic Economic Journal, Vol. 42, No. 4, March 2015, p. 107-121. With Yazid Dissou, and Lilia Karnizova.
Journal article link
Author version available here.
Despite substantial interest in the role of energy in the economy, the degree of substitutability between energy and other production inputs and the way energy should be included in the production function remain unresolved issues. This study provides industry-level parameter estimates of two-level constant elasticity of substitution (CES) functions that include capital, labor and energy inputs and allow for technological change, for Canada. In contrast to many existing studies, we do not impose prior restrictions on the order of input nesting, and we report the estimates for three possible specifications. We find that a nested production structure, which first combines labor and energy into a composite good that is then combined with capital, fits the Canadian data best, in terms of respecting the restrictions imposed by cost minimization. We also find rather low elasticities of substitution between capital and labor, and limited evidence of exogenous technological change.
Journal article link
Author version available here.
Despite substantial interest in the role of energy in the economy, the degree of substitutability between energy and other production inputs and the way energy should be included in the production function remain unresolved issues. This study provides industry-level parameter estimates of two-level constant elasticity of substitution (CES) functions that include capital, labor and energy inputs and allow for technological change, for Canada. In contrast to many existing studies, we do not impose prior restrictions on the order of input nesting, and we report the estimates for three possible specifications. We find that a nested production structure, which first combines labor and energy into a composite good that is then combined with capital, fits the Canadian data best, in terms of respecting the restrictions imposed by cost minimization. We also find rather low elasticities of substitution between capital and labor, and limited evidence of exogenous technological change.
GHG Mitigation Policies and Employment; A CGE Analysis with Wage Rigidity and Application to Canada (2013) Canadian Public Policy, Vol. XXXIX Supplement 2 2013, S53-S65. With Yazid Dissou.
Jstor link
Author version available here.
We use a general equilibrium framework to assess the impact of carbon mitigation policies in the presence of labour market rigidities. We analyze the impact of reducing CO2 emissions in a cap-and-trade system and the implications of different revenue-recycling options. Our results suggest that a policy has a negative impact on employment and welfare when permit revenues are recycled as lump-sum transfers to households. Using the carbon proceeds to reduce payroll tax achieves better outcomes, as the benefits outweigh the pure abatement cost. Moreover, using permit revenues to reduce payroll tax of low-skill workers alone represents the best option.
Jstor link
Author version available here.
We use a general equilibrium framework to assess the impact of carbon mitigation policies in the presence of labour market rigidities. We analyze the impact of reducing CO2 emissions in a cap-and-trade system and the implications of different revenue-recycling options. Our results suggest that a policy has a negative impact on employment and welfare when permit revenues are recycled as lump-sum transfers to households. Using the carbon proceeds to reduce payroll tax achieves better outcomes, as the benefits outweigh the pure abatement cost. Moreover, using permit revenues to reduce payroll tax of low-skill workers alone represents the best option.