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We use a nationally representative survey to investigate the incidence of discrimination against internal migrant workers in urban China, considering both migrants from rural areas (rural migrants) and those from other urban areas (urban migrants). We find that both rural and urban migrants are discriminated out of jobs with formal labour contracts. Results also suggest that urban migrants are compensated for working in the informal sector by earning higher wages. There is evidence however of wage discrimination against rural hukou status. A semi-parametric method suggests a larger discrimination against migrants in the upper half of the wage distribution. Discrimination against migrants seems not to decrease as their duration of stay in the urban labour market increases. JEL codes: J7; J51; O15; N35

This paper focuses on the effects of foreign direct investment (FDI) on skill inequality amongst countries. New growth models and international business studies predict that when countries liberalize their trade and investment regime in an environment of imperfect technology transfers, they will specialize in activities depending on the initial conditions such as skill endowments. Countries with few skills tend to specialize in low-skill intensive production, while countries with a high innovation rate and skill endowment tend to specialize in the production of high-skill intensive goods. The econometric evidence, based on an unbalanced panel for 111 countries over seven 5-year time periods from 1970 to 2000, confirms that FDI enhances skill development (particularly secondary and tertiary enrolment) in countries that are relatively well endowed with skills to start with. There are important policy conclusions for national governments when FDI tends to raise international skill inequalities. In particular, developing countries with low-skill endowments that attract investors would do well to co-ordinate actively their human resources policies with investor needs in order to bring the country to a higher skill path.

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