Labor Productivity and Trade Liberalization: Evidence from China

Presented and defended by: Wang Bin

Published by Trendline Economics, in conjunction with Université Paris 1 – Panthéon Sorbonne

Advising Professor Sandra Poncet, Paris School of Economics & Université Paris 1 - Panthéon Sorbonne

Abstract

International trade is a very important part of China’s economy. And one of the most important issues is the trade liberalization on labor productivity. This paper is based on the theory of Melitz and Ottaviano (2008). We revise the empirical model developed by Chen et al. (2009) so that it will be more consistent with the theoretical model. We separate labor productivity into two dimensions: extensive margin labor productivity and intensive margin labor productivity. For the theoretical model, which takes intensive labor productivity more heavily into consideration, we take value added per unit per worker as the input labor productivity in the empirical analysis. The model is in the sector level. All the sector level databases are from CEPII and GDP data is from World Bank. We take China as the domestic country and 180 countries are included in the sample from 1996 to 2006. We make pairwise of China – foreign country – sector to estimate the short run effect by using OLS, fixed effect model and first order difference model, and to estimate the long run effect by using error correction model.

The results show that domestic trade liberalization has a positive effect on labor productivity, while foreign trade liberalization has a negative effect on labor productivity.

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Aging Workers And Pension Systems, And Their Effect On A Nation’s Productivity And Inequality

Presented and defended by: Michael Molinski and Xinyue Wei

Published by Trendline Economics, in conjunction with Université Paris 1 – Panthéon-Sorbonne

Advising Professor Maria del Carmen Camacho

Abstract

There are three major themes that this paper will attempt to show. First, it will show how the effects of the age of a workforce can have an impact on a nation’s productivity and growth. Then, by analyzing the effect of life expectancy on productivity, and forecasts of the age of countries, it will show how the age of a workforce is changing and how some countries are aging faster than some others and will continue to do so over the next 35 years. Lastly, it will show how a nation’s pension system can have an effect on workers and their productivity, and demonstrate how the design of a pension system can differ by country.

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