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Labor market adjustments after a large import shock: Evidence from the German clothing industry and the Multi-Fibre Arrangement

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  • Nils Braakmann

    ()
    (Institute of Economics, Leuphana University of Lüneburg, Germany)

  • Joachim Wagner

    ()
    (Institute of Economics, Leuphana University of Lüneburg, Germany)

Abstract

This paper considers labor market adjustments following a large import shock in the German clothing industry caused by the phasing out of the Multi-Fibre Arrangement. Using the German shoe industry as a control group and administrative data, we study adjustments on the individual and firm level using difference-in-differences. Our results suggest relatively small increases in unemployment risk and no wage effects on the individual level, despite a 30% increase in plant mortality. Part of the different effects found for plants and individuals can be attributed to the reallocation of workers into other industries and occupations.

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Bibliographic Info

Paper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 155.

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Length: 34 pages
Date of creation: Dec 2009
Date of revision:
Handle: RePEc:lue:wpaper:155

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  1. Robert C. Feenstra & Gordon H. Hanson, 1996. "Globalization, Outsourcing, and Wage Inequality," NBER Working Papers 5424, National Bureau of Economic Research, Inc.
  2. Horst Raff & Joachim Wagner, 2009. "Intra-Industry Adjustment to Import Competition: Theory and Application to the German Clothing Industry," CESifo Working Paper Series 2851, CESifo Group Munich.
  3. Paul, Catherine J Morrison & Siegel, Donald S, 2001. " The Impacts of Technology, Trade and Outsourcing on Employment and Labor Composition," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(2), pages 241-64, June.
  4. James H. Stock & Mark W. Watson, 2006. "Heteroskedasticity-Robust Standard Errors for Fixed Effects Panel Data Regression," NBER Technical Working Papers 0323, National Bureau of Economic Research, Inc.
  5. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Department of Economics 95-14, California Davis - Department of Economics.
  6. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
  7. Iris Koch & Holger Meinken, 2004. "The Employment Panel of the German Federal Employment Agency," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 124(2), pages 315-325.
  8. Michael Pfaffermayr & Peter Egger & Andrea Weber, 2007. "Sectoral adjustment of employment to shifts in outsourcing and trade: evidence from a dynamic fixed effects multinomial logit model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 559-580.
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Cited by:
  1. repec:got:cegedp:133 is not listed on IDEAS
  2. Nils Braakmann & Alexander Vogel, 2011. "How does economic integration influence employment and wages in border regions? The case of the EU enlargement 2004 and Germany’s eastern border," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 147(2), pages 303-323, June.
  3. Berner, Eike & Birg, Laura, 2012. "Retailers and Consumers: The pass-through of import price changes," Center for European, Governance and Economic Development Research Discussion Papers 133, University of Goettingen, Department of Economics.

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