Fringe Benefits and Chinese Import Competition

While many studies have quantified the impact of Chinese import competition on U.S. wages, to my knowledge this is the first study to also estimate the effect on fringe benefits. This is important because in the United States, fringe benefits are now more than 30% of compensation. I first argue that if trade affects the share of benefits in compensation, focusing on wages and ignoring fringe benefits may give us misleading estimates of the effect of trade on workers' total compensation. Using data from the National Longitudinal Survey of Youth 1979, I track the subsequent outcomes of workers who were working in manufacturing in 1996. Similar to Autor et al. (2014), I find that exposure to Chinese competition negatively affects wage income. As to fringe benefits, the effect on participation in a defined benefit retirement plan and the availability of vacation days is negative and significant. The effects on other benefits are usually negative but imprecisely estimated. The effect on the overall dollar value of benefits is negative and significant. However, in percentage terms, the effect on benefits is smaller than the effect on wages. This suggests that, in percentage terms, the impact of Chinese import competition on overall compensation is less severe than the one found in Autor et al. (2014) for wages.