Abstract
This paper tests the total and sector impact of material off-shoring (MO), service off-shoring (SO) and narrow material off-shoring (NMO) on the wage gap in 28 manufacturing industries in China. The results show that MO and NMO significantly widen the wage gap and that the impact of SO is not significant. Whereas the demand for imported intermediate inputs increases, especially for intermediate inputs from themselves in technology-intensive industries, demand for skilled labor and wages also increase. In the primary production industries, increases in domestic RD in labor-intensive and resource-intensive industries and technology-intensive industries, capital-saving technological progress narrows the wage gap, whereas R&D spillover from imports significantly increases the wage gap.
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