The Contribution of the Development of Transportstion to the Narrowing of Earnings Differences by Ethnicity in China
Zixin Yang
What the paper says
ABSTRACT: Ethnic minorities are about eight percent of China's population. Ethnic minorities have historically had lower earnings than the majority Han ethnic group. The earnings gap has narrowed in recent years. We investigate the contribution to the narrowing of the earnings gap by ethnicity of two developments in transportation: high-speed rail and the national highways. Both developments in transportation are expected to facilitate labor migration and the diffusion of regional economic development. We use individual-level panel data from the China Family Panel Studies for 2010 to 2018 and a sample of working-age individuals. We estimate difference-in-differences models for annual earnings and for the probability of migration. We control for regional differences in economic conditions and their change over time. With our models we investigate how connections of an individual's location to the high-speed rail and the national highway networks influence the effect of ethnicity on earnings and on migration. Migration is a likely mechanism that narrows earning differences by ethnicity. We find that the development of high-speed rail and highways contributed significantly to the narrowing of the ethnicity earnings gap. The effects of both developments in transportation are larger two years after connection to each transportation network relative to the effect after connection for one year. In all cases we document a closing of the ethnicity earnings gap after controlling for the effects of individual and location characteristics. We investigate the influence of regional development policies that were in effect as the development of transportation was taking place. We find that the economic zones regional development policy amplifies the effect of connection to the highway network on earnings. We document that the development of highways resulted in an increased probability of migration by ethnic minorities. The effect is larger two years after the connection to the highway network than one year after the connection. The narrowing of the earnings gap by ethnicity resulting from of the development of high-speed rail and of highways contributes to the reduction in earnings inequality that is an important policy objective. More generally, the development of transportation improves the allocation of labor and economic efficiency
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.