Associate Professor, Beijing Normal University.

http://maxdo.bnu.edu.cn/szdw/gjjjymyzyjs/214847.html

Based on a comprehensive rural household survey from China, this paper examines the impact of regional export expansion on rural household income. For identification, we exploit the regional variation in the exposure to the reductions in tariff uncertainty caused by the Permanent Normal Trade Relations that the U.S. granted to China upon China’s WTO entry. We find that non-agricultural exports substantially raised rural income, with stronger effects on lower income households. Such export-induced income growth is driven by higher labor force participation rate, wage increases in both agricultural sector and non-agricultural sector, and a reallocation of labor between these two sectors. Exports also significantly reduced the incidence of local poverty.