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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front Econ Chin    2008, Vol. 3 Issue (4) : 598-626
research-article |
The regional effects of marginal wage subsidies
REN Bijie
School of Economics, Nankai University, Tianjin 300071, China;
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The main research of this paper is the regional effects of marginal wage subsidies. Some regional economic issues are discussed such as production scales, operating profits, industry distribution, and expenditure distribution across the rich and poor regions. It is proven that, marginal wage subsidies improve the employment and raise the industrial share of the poor region, but meanwhile the expenditure share in the rich region increases for marginal wage subsidies. It is also showed that, the relationship between the effectiveness of marginal wage subsidies and the level of openness to trade is ambiguous when the wage level is very high, however, if the wage level is low enough thus marginal wage subsidies can cause relatively large employment increase, marginal wage subsidies cooperating with freer trade policy would be more effective.

Keywords employment increase      marginal wage subsidies (MWS)      regional inequality     
Corresponding Authors: REN Bijie,   
Issue Date: 05 December 2008
 Cite this article:   
REN Bijie. The regional effects of marginal wage subsidies[J]. Front Econ Chin, 2008, 3(4): 598-626.
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