Economics Seminar（2014-05）

Topic: Housing Price Raises Wage: How did China’s land policy after 2003 affect its labor costs?

Speaker: Ming LU

Affiliation: Fudan University

Time: Tuesday, 25 March. 14:00-15:30pm
Location: Room217, Guanghua Building 2

Abstract：
Since 2003, China’s wage has risen quickly. In the same year, the land policy was changed to give central and western regions more land use quotas to support their development. Using a 2SLS estimation based on city-level panel data, this paper finds that the relative decline in land supply raised housing prices and consequently increased wages. The effect of housing price on wage is mainly driven by the east region after 2003, where land supply is tightly controlled. We also present evidence that there is no faster growth in per capita GDP or minimum wage in the east after 2003. The major findings are robust no matter we use the sub-samples on the border between the central and the east regions, or employ other instrumental variables for housing price.

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