In recent decades, cheap labor has played a central role in the Chinese model, which has relied on expanded participation in world trade as a main driver of growth. At the beginning of China's economic reforms in 1978, the annual wage of a Chinese urban worker was only $1,004 in U.S. dollars. The Chinese wage was only 3 percent of the average U.S. wage at that time, and it was also significantly lower than the wages in neighboring Asian countries such as the Philippines and Thailand. The Chinese wage was also low relative to productivity. However, wages are now rising in China. In 2010, the annual wage of a Chinese urban worker reached $5,487 in U.S. dollars, which is similar to wages earned by workers in the Philippines and Thailand and significantly higher than those earned by workers in India and Indonesia. China's wages also increased faster than productivity since the late 1990s, suggesting that Chinese labor is becoming more expensive in this sense as well. The increase in China's wages is not confined to any sector, as wages have increased for both skilled and unskilled workers, for both coastal and inland areas, and for both exporting and nonexporting firms. We benchmark wage growth to productivity growth using both national- and industry-level data, showing that Chinese labor was kept cheap until the late 1990s but the relative cost of labor has increased since then. Finally, we discuss the main forces that are pushing wages up.

How much of the increase in sex ratio (male to female) at birth since the early 1980s in China is attributed to increased prenatal sex selection? This question is addressed by exploiting the differential introduction of diagnostic ultrasound in the country during the 1980s, which significantly reduced the cost of prenatal sex selection. We find that the improved local access to ultrasound technology has resulted in a substantial increase in sex ratio at birth. Our estimates indicate that roughly 40 to 50 percent of the increase in sex imbalance at birth can be explained by local access to ultrasound examinations.

Analyzing data from a unique survey of managers of Chinese private firms, we investigate how family ties with firm heads affect managerial compensation and job assignment. We find that family managers earn higher salaries and receive more bonuses, hold higher positions, and are given more decision rights and job responsibilities than nonfamily managers in the same firm. However, family managers face weaker incentives than professional managers, as seen in the lower sensitivity of their bonuses to firm performance. Our findings are consistent with the predictions of a principal-agent model that incorporates family trust and endogenous job assignment decisions.

To examine poverty on China’s campuses, we utilize the Chinese College Students Survey carried out in 2010. With poverty line defined as the college-specific expenditures a student needs to maintain the basic living standard on campus, we find that 22 percent of college students in China are living in poverty. Poverty is more severe among students from the rural or Western parts of the country. The college need-based aid program must be improved because its targeting count error is over 50 percent. Lacking other income sources, poor students rely heavily on loans and working to finance their college education.

This paper's findings suggest that an arbitrary Chinese policy that greatly increases total suspended particulates (TSPs) air pollution is causing the 500 million residents of Northern China to lose more than 2.5 billion life years of life expectancy. The quasi-experimental empirical approach is based on China’s Huai River policy, which provided free winter heating via the provision of coal for boilers in cities north of the Huai River but denied heat to the south. Using a regression discontinuity design based on distance from the Huai River, we find that ambient concentrations of TSPs are about 184 μg/m3 [95% confidence interval (CI): 61, 307] or 55% higher in the north. Further, the results indicate that life expectancies are about 5.5 y (95% CI: 0.8, 10.2) lower in the north owing to an increased incidence of cardiorespiratory mortality. More generally, the analysis suggests that long-term exposure to an additional 100 μg/m3 of TSPs is associated with a reduction in life expectancy at birth of about 3.0 y (95% CI: 0.4, 5.6).

Since the introduction of the one-child policy in China in 1979, many more boys than girls have been born, foreshadowing a sizable bride shortage. What do young men unable to find wives do? This paper focuses on criminality, an asocial activity that has seen a marked rise since the mid-1990s. Exploiting province-year level variation, we find an elasticity of crime with respect to the sex ratio of 16- to 25-year-olds of 3.4, suggesting that male sex ratios can account for one-seventh of the rise in crime. We hypothesize that adverse marriage market conditions drive this association.

In the 1990s, rural youth from poor counties in China had limited access to college. After mass college expansion started in 1998, however, it was unclear whether rural youth from poor counties would gain greater access. The aim of this paper is to examine the gap in college and elite college access between rural youth from poor counties and other students after expansion. We estimate the gaps in access by using data on all students who took the college entrance exam in 2003. Our results show that gaps in access remained high even after expansion. Rural youth from poor counties were seven and 11 times less likely to access any college and elite Project 211 colleges than urban youth, respectively. Much larger gaps existed for disadvantaged subgroups (female or ethnic minority) of rural youth from poor counties. We also find that the gaps in college access were mainly driven by rural–urban differences rather than differences between poor and non-poor counties within rural or urban areas.

In 1987, 4 per cent of girls were adopted within China. Why? Unlike infanticide, abandonment rids parents of daughters while preserving the supply of potential brides. In fact, an erstwhile tradition common in Fujian and Jiangxi provinces had parents of sons adopting an infant girl to serve as a future daughter-in-law and household help. Analysing a nationally representative 1992 survey of children, we found that: (1) girl adoptions were concentrated in the above-mentioned provinces; (2) girls were predominantly adopted by families with sons; (3) adopted girls faced substantial disadvantage as measured by school attendance at ages 8–13. In the 1990s, as the sex ratio at birth climbed, were girls aborted rather than abandoned? Observing that in the 2000 census too many girls appear in families with older sons, we estimated that at least 1/25 girls were abandoned in the 1990s, a proportion that in Fujian and Jiangxi may have peaked at 1/10 in 1994.

Using data from China's Urban Household Survey and exploiting China's mandatory retirement policy, we use the regression discontinuity approach to estimate the impact of retirement on household expenditures. Retirement reduces total non-durable expenditures by 20 percent. Among the categories of non-durable expenditures, retirement reduces work-related expenditures and expenditures on food consumed at home but has an insignificant effect on entertainment expenditures. After excluding these three components, retirement does not have an effect on the remaining non-durable expenditures. It suggests that the retirement consumption puzzle might not be a puzzle if a life-cycle model with home production is considered.

This paper provides first-hand firm-level evidence on Chinese exporters' reaction to RMB exchange rate movements. We find that the RMB price response to exchange rate changes is very small, indicating relatively high exchange rate pass-through into foreign currency denominated prices, while the volume response is moderate and significant. Furthermore, exporters with higher productivity price more to market, though the pass-through is still very high. Other sources of heterogeneity, such as import intensity, distribution costs, income level of the destination countries, and foreign ownership also matter. Moreover, RMB appreciation reduces the probability of entry as well as the probability of continuing in the export market.