An Analysis Of The Effect Of Import And Export Trade On China’s Wage Gap

The income gap keeps widening, is a phenomenon that does not coordinate withthe rapid economic growth during the process of reform and opening up in ourcountry. Besides, the polarization and constant widening of income gap hasobviously hampered our future economic and social sustainable development. As thewage income still accounts for a significant proportion of Chinese residents’ incomeand wage income gap is also an important showing of the widening income gap, thispaper studies wage income gap and how it is affected by import and export trade.There are many reasons that resulted in the wage income gap. From the view ofimport and export trade, this paper analyzed the effects of import and export trade onthe wage income gap in China both qualitatively and quantitatively based on thetheoretical results of previous studies. The qualitative analysis of the results showedthat the import and export trade narrowed the wage gap because of commodityprices, while at the same time widened the gap through three conductionmechanisms as advances in technology, expanding demand preferences and labordemand elasticity. The empirical analysis made on the panel data of30provinces ofChina demonstrates that the import widens the wage gap and the export narrows thewage gap in our country, but in general, trade development widens the wage gap. Onthe basis of theoretical analysis, according to the specific effects of import andexport trade made on wage income gap and in the aim of achieving the purpose ofimproving income and welfare level and narrowing domestic wage gap through theimport and export trade, this paper thus put forward the following strategies:changing China’s trade patterns majorly featured by processing trade export so as topromote the upgrading of industrial structure, encouraging technological innovation,vigorously popularizing education and skills training for employees, guidingconsumers’ demand preferences and encouraging moderate consumption, improvingthe social security system a step further and actively responding to the impact oflabor demand.