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Winners and Losers from a Commodities-for-Manufactures Trade Boom

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  • Francisco Costa
  • Jason Garred
  • Joao Paulo Pessoa

Abstract

A recent boom in commodities-for-manufactures trade between China and other developing countries has led to much concern about the losers from rising import competition in manufacturing, but little attention on the winners from growing Chinese demand for commodities. Using census data for Brazil, we find that local labour markets more affected by Chinese import competition experienced slower growth in manufacturing wages and in-migration rates between 2000 and 2010, and greater rises in local wage inequality. However, in locations benefiting from rising Chinese demand, we observe higher wage growth, lower takeup of cash transfers and positive effects on job quality.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1269.

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Date of creation: May 2014
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Handle: RePEc:cep:cepdps:dp1269

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

Related research

Keywords: China; trade; commodities-for manufactures; wages; employment; informality;

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  7. Paz, Lourenço S., 2014. "The impacts of trade liberalization on informal labor markets: A theoretical and empirical evaluation of the Brazilian case," Journal of International Economics, Elsevier, vol. 92(2), pages 330-348.
  8. Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003. "The response of the informal sector to trade liberalization," Journal of Development Economics, Elsevier, vol. 72(2), pages 463-496, December.
  9. Mion, Giordano & Zhu, Linke, 2013. "Import competition from and offshoring to China: A curse or blessing for firms?," Journal of International Economics, Elsevier, vol. 89(1), pages 202-215.
  10. Leonardo Iacovone & Ferdinand Rauch & L. Alan Winters, 2010. "Trade as an Engine of Creative Destruction Mexico experience with Chinese competition," Working Paper Series 0510, Department of Economics, University of Sussex.
  11. Fernando M. Arag?n & Juan Pablo Rud, 2013. "Natural Resources and Local Communities: Evidence from a Peruvian Gold Mine," American Economic Journal: Economic Policy, American Economic Association, vol. 5(2), pages 1-25, May.
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