The Research Of GVC Participation's Effect On Wage Inequality

Currently international production and global consumption has become the main trend,but there still exists a lot of "anti-globalization" voices with the rise of global value chain,one of which the most important concern is the opening will widen domestic income gap and stimulate domestic contradictions.Traditional trade theory is based on the complete industrial division that is difficult to effectively analyze and explain this kind of phenomenon,while from the perspective of value chains,we can be more finely spun out the different effects of different value chains' participation.This thesis calculates each country's backward participation index and income gap using input-output table and social economic accounts from WIOD database to figure out the relationship between GVC's participation and domestic income gap.As for the backward participation,we find that a high level of backward participation will lead to a relatively small income gap and this negative relationship always holds regardless of export products' category and export countries' development degree.Furthermore,compared with final products,the increase of intermediate products' backward participation has a more obvious narrowing influence on income gap.And final products' increase on backward participation poses a bigger effect in developed countries while intermediate products do so in developing countries.As for the forward participation,we find that forward participation will significantly widen the income gap.It is more apparent that part of forward participation which is contained in another country's export of final product will lead to a widen wage gap,while this part in developing countries plays a limited role.Therefore,China should stick to opening to the outside world and actively participate in global value chain cooperation,pay more attention to intermediate products' division of labor cooperation,scheme out reasonable industry development planning according to each industry's condition,and increase the proportion of domestic value-added,and pay attention to the reasonable adjustment of domestic economy operation at the same time.