Global market and income gaps between industries: evidence from finance industry and manufacturing industry

The Journal of Chinese Sociology

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[1] 0000 0001 0125 2443, grid.8547.e, Department of Sociology, Fudan University, 220 Handan Road, Yangpu District, 200433, Shanghai, China;

关键词: Economic globalization;    Trade;    Foreign direct investment (FDI);    Labor market segregation;    Finance industry;    Manufacturing industry;   

DOI  :  10.1186/s40711-019-0103-3

来源: publisher

【 摘 要 】

The income gap among industries in China is usually explained by the theory of segmented labor market. However, this perspective cannot explain why the finance industry has the highest average income among the monopoly industries, while the manufacturing industry has much lower incomes than any other competitive industry. This paper argues that it can be explained by the way China participates in the economic globalization. Liberalization of the manufacturing industry and protection of the finance industry are China’s strategies in dealing with opportunities and challenges of economic globalization. This paper compares the average incomes of monopoly and competitive industries, as well as that of finance and manufacturing. Analyses of panel data spanning from 2000 to 2014 show that the bigger the size of foreign trade, the higher the average income of the finance industry, and the lower the average income of the whole monody industries; at the same time, FDI reduces the average income of the manufacturing industry. This research advances the literature of segmented labor market by pointing out that income inequality between industries in China should be understood in the context of economic globalization.

【 授权许可】

CC BY