The employment and wage effects of export VAT rebates: evidence from China

Bo Gao, Jing Ma, Zheng Wang
2020 Review of World Economics  
AbstractThis paper studies the employment and wage effects of VAT rebates to exporters with comprehensive firm-product-level data of China. It is found that the adjustments in VAT rebates significantly and positively affect firm's employment but have no statistically significant effect on firm's wage. Moreover, this paper finds that the employment effect of VAT rebates is heterogeneous across firms. In particular, low-productivity firms are more sensitive to the adjustments of VAT rebates than
more » ... igh-productivity firms, suggesting that an increase of VAT rebates may cause mis-reallocation of resources.
doi:10.1007/s10290-020-00400-3 fatcat:vei6vbnjbbea5b6b5rlox3t7oy