A Study Of The Impact Of China's Foreign Trade On Industry's Wage Gap

China's foreign trade has experienced rapid growth since the reform and opening up,especially after the China's accession into the World Trade Organization.The total trade volume rose from 20.6 billion dollars in 1978 to 4.3 trillion in 2014 and the amount of trade share has increased continuously.The development of international trade and openness has increased inhabitants' income levels while income gap expands.Urban-rural income gap,which measured by the ratio of urban disposable incomes to rural net incomes,has increased to 3.28 in 2006.Besides,the development of industrial income distribution does not balance.In 2009,the extremes ratio of industrial wage was up to 4.21.Recent years,China implemented smooth economic policy under the background of slowing global economy.Thus the foreign trade increases gently and income gap tends to be reasonable.As the development of trade and the expansion of income gap show the similar growth trends,the research of their relationship has become the important topic that economists and managers concerned.Some scholars have studied income gap in open conditions.However,there is no unanimous conclusion as the differences of data and measurement model.This thesis will measure income level with wage and study the impact of foreign trade on industrial wage gap under the open condition.This thesis has five parts.The first part is introduction,includes the background and significance of the topic,the related research results,the basic frame and methods,as well as the innovations and deficiencies.The second part introduces the classical trade theory of income distribution first,then discuss how foreign trade has an impact on the industrial wage gap through price transmission mechanism,employment mechanism,technological progress mechanism and industrial structure adjustment mechanism.The third chapter is descriptive statistics,contains China's current foreign trade development and the income gap.The Theil index which measured the industry income gap has been classified into inter industry Theil index and intra industry Theil index.The fourth part is empirical analysis.This thesis selects 30 provinces in 2003-2014,studied the Theil index as well as inter industry Theil index and intra industry Theil index,which calculated by the average wage of the industry,as the explained variables.The empirical research use export and import dependence as the main research explanatory variables to measure the trade openness and added some control variables such as the fixed assets investment and foreign investment reliance into econometric model.The fifth chapter is the conclusion and policy recommendations on how to promote the balanced development of the industry and the rational operation of the economy.From the point view of the whole country,the degree of dependence on foreign trade rises at first and goes down latter,and the industrial wage gap measured by the Theil index also have the same trend in general.The empirical results show that the increase of export dependence will increase the industrial wage gap,and the increase of import dependence will reduce the industrial wage gap.This conclusion also applies to the inter industry gap,but the regression coefficients are insignificance when it comes to the intra industry gap.Foreign trade affects the wage gap between industries instead of intra industry.