My research relates primarily to the fields of labor and environmental economics, while also applying tools from international trade and media economics. I am interested in studying the impact of globalization on low- and middle-income countries, particularly in terms of their labor markets and environment, and how technology and policy intervention can help reduce the harmful effects of this process. The first section of this statement outlines my work on the trade effects in China, particularly my job market paper. The second section discusses my work on the air filtration projects in China, with special focus on the impact of air pollution on labor productivity. The third section discusses my work on Chinese news reports on pollution events. In the fourth section, I briefly describe my plans for future research.
1. Trade Effects in China
Recent studies have revealed the significant negative impact of Chinese import competition on manufacturing employment in developed countries, such as the US, Germany, Norway, and Denmark, and the even higher rate of suicide among white males in the US. In response to the literature and recent debates about the negative trade effects in the US, my job market paper, entitled “Local Labor Market Effects of Exports and Internal Migration: the Case of China”, investigates the positive impact of trade on Chinese labor markets, and find that, given the same amount of trade, the positive impact on Chinese manufacturing employment triples the negative impact on American workers. One key reason for this substantial positive impact is the extensive interregional labor flow in China. This study is of considerable economic importance for at least two reasons. First, it shows the benefits of trade on labor markets in developing countries, as it raises manufacturing employment, shifts economies from agricultural to manufacturing and service sectors. Second, it suggests the importance of labor mobility in spreading the benefits of trade to larger populations within developing countries.
Within my job market paper, I instrument for the growth in Chinese exports using the growth of exports from low- and middle-income [JD1] South Asian countries, to address concerns about unobserved changes in regional supply forces. This instrumental variable approach reveals that the formation of the World Trade Organization, advancement of communication technologies, and lower shipment costs all contribute to the decrease in barriers to international trade. It also helps identify other trade effects in China, such as one of its costs – air pollution. One of my ongoing projects involves the study of the impact of production of exports on air pollution in China. Using the list of environmental goods endorsed by the Asia-Pacific Economic Cooperation (APEC), I will test whether export production improves air quality in China through the adoption of green inputs.
2. China’s Air Filtration Projects
While serving as a postdoc at the Harvard Center for green buildings and cities, I also work on China’s air filtration projects with Professor Richard Freeman. Air pollution presents great social and economic costs. These projects analyze whether and how technology intervention can reduce the harm of air pollution on individuals’ performance in the short and long run, by examining the impact of air purification in the built environment, including schools, factories, and residential houses. The goal of these projects is to conduct field experiments and statistical and epidemiological studies to estimate the impact of air filtration on health, education, and productivity, and develop a rigorous benefit-cost analysis of the filtration solution. The experiments are conducted in elementary schools in Hangzhou, China; a light bulb factory in Changzhou, China; and residential houses in Hebei, China.
In addition to these experiments, I am performing two related research works, studying the impact of air pollution on labor productivity in China. Both contribute to the literature in different ways. One expands the existing empirical studies to a broad geographic scope and longer time period, as I study all medium- or large-sized firms in China from 2000 to 2008. The existing literature on the subject usually studies the impact of an exogenous shock on a small group of workers in a short time period. It is hard to estimate the long-term effects, as workers may work harder the following days to compensate for the inefficiency of polluted days, or they simply become accustomed to pollution exposure. Using the policy shock that many highly polluted firms in coastal China were forced to close due to environmental regulation in recently years within a quasi-natural experiment, this research studies the impact of air pollution on labor productivity in firms that have been neighbors of those highly polluted firms by comparing differences before and after the shock. The Aerosol Optical Depth data from NASA is applied in this study to estimate air quality.
The other paper, coauthered with Professor Richard Freeman and Tao Chen, studies the impact of outside air on productivity of workers in a light bulb factory in China, as they differ in terms of exposure to outside air. The advantage of this paper is that it enables us to test the impact of health as a mechanism through which pollution affects productivity. This subject has not yet been studied in the literature. Using daily production from workers’ worksheets and daily air quality measures from a nearby monitoring station, we apply a difference-in-differences approach to exploit the difference between workers working in open and closed workshops on high- and low-pollution days.
3. China’s Media Policy and Water Pollution
In addition to the technology intervention, I also study how policy intervention, such as media policy, can reduce the harmful effects of pollution. China has been well known for its media control policy and ranks 176th out in 180 countries in terms of media freedom by Reporters without Borders. However, Chinese consumers trust the media. According to the Edelman Trust Barometer in 2016, China ranks 1st out of 27 major countries measured on this scale. I am coauthoring two papers with Professor Zhao Chen to study the role of media control in reporting pollution events and its impact on household welfare losses in China.
The first paper constructs a unique data set of Chinese local newspaper reports on severe water pollution events to document pollution news reporting under government media control, by exploiting the differences between party and non-party newspapers. It shows that, compared with non-party newspapers, party newspapers are less likely to report local water pollution and more likely to report upstream pollution, suggesting the impact of local governments. Based on the first study, the second study is among the first to evaluate the impact of government media control on households’ welfare losses, as measured by medical expenses in the case of water pollution. This shows that, in polluted areas, water pollution reports from local party newspapers are negatively associated with household medical expenses, while pollution itself is positively associated with household medical expenses. Correlations with reports from non-party newspapers are insignificant. The findings indicate that, even though media control policies in China limit party newspapers’ coverages on critical news such as pollution, households still benefit from their news reports rather than from non-party newspapers, maybe because news reports from party newspapers are more precise, so consumers trust them more.
4. Concluding Remarks
Most of my research focuses on China. I have gained great knowledge about the Chinese economy as well as the available datasets. I am also interested in study the relationship between Chinese and other economies, for example, how college students from China and South Korea, as a demand side shock, affect job placement of the US PhD students. I look forward to collaborating and extend my research in the future.