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Worker-Level Consequences of Import Shocks

Author

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  • Nilsson Hakkala, Katariina

    (Aalto University)

  • Huttunen, Kristiina

    (Aalto University)

Abstract

We analyse the effects of imports on employment and earnings by distinguishing between import competition in final products and firms' use of imports in production (offshoring). We use Finnish worker-firm data merged with product-level trade data. We focus on Chinese imports and instrument them by changes in China's share of world exports to other EU countries. Both types of importing increase the job loss risk for all workers and, in particular, for workers in production occupations. An increase in import competition has larger negative effects than an increase in offshoring. Production workers suffer the largest earnings losses, while for high- skilled workers the wage-effect is positive.

Suggested Citation

  • Nilsson Hakkala, Katariina & Huttunen, Kristiina, 2016. "Worker-Level Consequences of Import Shocks," IZA Discussion Papers 10033, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10033
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    References listed on IDEAS

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    Citations

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    Cited by:

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    2. Terhi Maczulskij, 2019. "Occupational Mobility of Routine Workers," Working Papers 327, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    3. Sónia Cabral & Pedro S. Martins & João Pereira dos Santos & Mariana Tavares, 2021. "Collateral Damage? Labour Market Effects of Competing with China—at Home and Abroad," Economica, London School of Economics and Political Science, vol. 88(350), pages 570-600, April.
    4. Katrin Huber & Erwin Winkler, 2016. "All We Need is Love? Trade-Adjustment, Inequality, and the Role of the Partner," SOEPpapers on Multidisciplinary Panel Data Research 873, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Zouheir El-Sahli & Joakim Gullstrand & Karin Olofsdotter, 2022. "The external effects of offshoring on job security in SMEs," Small Business Economics, Springer, vol. 59(4), pages 1613-1640, December.
    6. Winkler, Erwin, 2020. "Diverging paths: Labor reallocation, sorting, and wage inequality," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224535, Verein für Socialpolitik / German Economic Association.
    7. Sari Kerr & Terhi Maczulskij & Mika Maliranta, 2020. "Within and between firm trends in job polarization: the roles of globalization and technology [The skill complementarity of broadband internet]," Journal of Economic Geography, Oxford University Press, vol. 20(4), pages 1003-1039.
    8. Nolan, Brian & Richiardi, Matteo & Valenzuela, Luis, 2018. "The Drivers of Inequality in Rich Countries," MPRA Paper 89806, University Library of Munich, Germany.
    9. Tuhkuri, Joonas, 2016. "Trade and Innovation: Matched Worker-Firm-Level Evidence," ETLA Working Papers 39, The Research Institute of the Finnish Economy.
    10. Dorn, David & Levell, Peter, 2021. "Trade and Inequality in Europe and the US," CEPR Discussion Papers 16780, C.E.P.R. Discussion Papers.
    11. Ariu, Andrea & Nilsson Hakkala, Katariina & Jensen, J. Bradford & Tamminen, Saara, 2019. "Service Imports, Workforce Composition, and Firm Performance: Evidence from Finnish Microdata," ETLA Working Papers 70, The Research Institute of the Finnish Economy.
    12. Lee Branstetter & Ana Venancio & Brian Kovak, 2019. "The China Shock and Portuguese Manufacturing," 2019 Meeting Papers 1051, Society for Economic Dynamics.
    13. Merja Kauhanen & Terhi Maczulskij, 2017. "Where do workers from declining routine jobs go and does migration matter?," Working Papers 314, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    14. El-Sahli, Zouheir & Gullstrand, Joakim & Olofsdotter, Karin, 2017. "The Internal and External Effects of Offshoring on Job Security," Working Papers 2017:14, Lund University, Department of Economics.

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    More about this item

    Keywords

    offshoring; import competition; employment; earnings;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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