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Made in China, Sold in Norway: Local Labor Market Effects of an Import Shock

Author

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  • Balsvik, Ragnhild

    (Norwegian School of Economics)

  • Jensen, Sissel

    (Norwegian School of Economics)

  • Salvanes, Kjell G.

    (Norwegian School of Economics)

Abstract

We analyze whether regional labor markets are affected by expo- sure to import competition from China. We find negative employment effects for low-skilled workers, and observe that low-skilled workers tend to be pushed into unemployment or leave the labor force altogether. We find no evidence of wage effects. We partly expect this in a Nordic welfare state where firms are flexible at the employment margin, while centralized wage bargaining provides less flexibility at the wage margin. Our estimates suggest that import competition from China explains almost 10% of the reduction in the manufacturing employment share from 1996 to 2007 which is half of the effect found by Autor, Dorn and Hanson (2013) for the US.

Suggested Citation

  • Balsvik, Ragnhild & Jensen, Sissel & Salvanes, Kjell G., 2014. "Made in China, Sold in Norway: Local Labor Market Effects of an Import Shock," IZA Discussion Papers 8324, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8324
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    More about this item

    Keywords

    import competition; local labor markets; Norway;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • 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

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