This paper examines the impact of globalization on wage inequality using Chinese Urban Household Survey
data from 1988 to 2008. Exploring two trade liberalization shocks, Deng Xiaoping's Southern Tour in 1992
and China's accession to the World Trade Organization (WTO) in 2001, we analyze whether regions more exposed
to globalization experienced larger changes in wage inequality than less-exposed regions. Contrary to
the predictions of the Heckscher–Ohlin model, we find that the WTO accession was significantly associated
with rising wage inequality. We further show that both trade liberalizations contributed to within-region inequality
by raising the returns to education (the returns to high school after 1992 and the returns to college
after 2001).