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The Impact Of Chinese Import Competition On The Local Structure Of Employment And Wages: Evidence From France

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  • Clément Malgouyres

Abstract

The rapid rise of Chinese exports over the past two decades has raised concerns about manufacturing jobs and wage inequality in high‐income countries. spillovers beyond the manufacturing sector are an important issue given the large size of the nontraded sector in modern economies as well as the imperfect spatial mobility of households. In this paper, I estimate the impact of Chinese import competition onto the structure of employment and wages of local labor markets in France, with an emphasis on spillovers effects beyond manufacturing and the degree of local wage inequality. Local employment and total labor income in both manufacturing and nonmanufacturing are negatively affected by rising exposure to imports. Import competition from China polarized the local structure of employment in the manufacturing sector. The wage distribution is uniformly negatively affected in manufacturing while the nontraded sector experiences wage polarization, i.e., a rise in upper‐tail inequality and a decline in bottom‐tail inequality. While overall wage inequality is on average not affected, I show that it increased in response to trade shocks in areas where the minimum wage is only weakly binding.

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  • Clément Malgouyres, 2017. "The Impact Of Chinese Import Competition On The Local Structure Of Employment And Wages: Evidence From France," Journal of Regional Science, Wiley Blackwell, vol. 57(3), pages 411-441, June.
  • Handle: RePEc:bla:jregsc:v:57:y:2017:i:3:p:411-441
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    File URL: https://doi.org/10.1111/jors.12303
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    Cited by:

    1. Gold, Robert & Dippel, Christian & Heblich, Stephan & Pinto, Rodrigo, 2017. "Instrumental Variables and Causal Mechanisms: Unpacking the Effect of Trade on Workers and Voters," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168152, Verein für Socialpolitik / German Economic Association.
    2. Francesco Chiacchio & Georgios Petropoulos & David Pichler, 2018. "The impact of industrial robots on EU employment and wages: A local labour market approach," Working Papers 25186, Bruegel.
    3. repec:nse:ecosta:ecostat_2017_497-498_1 is not listed on IDEAS
    4. Hoekman, Bernard & Nelson, Doug, 2018. "21st Century Trade Agreements and the Owl of Minerva," CEPR Discussion Papers 12620, C.E.P.R. Discussion Papers.
    5. Sónia Cabral & Pedro S. Martins & João Pereira dos Santos & Mariana Tavares, 2018. "Collateral Damage? Labour Market Effects of Competing with China - at Home and Abroad," Working Papers w201812, Banco de Portugal, Economics and Research Department.
    6. repec:bfr:rueban:2018:57 is not listed on IDEAS
    7. Lee Branstetter & Ana Venancio & Brian Kovak, 2019. "The China Shock and Portuguese Manufacturing," 2019 Meeting Papers 1051, Society for Economic Dynamics.
    8. repec:nse:ecosta:ecostat_2018_503-504_6 is not listed on IDEAS
    9. Luigi Bonatti & Andrea Fracasso, 2017. "Addressing the Core-Periphery Imbalances in Europe: Resource Misallocation and Expansionary Fiscal Policies," EconPol Working Paper 6, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    10. repec:ris:sphecs:0289 is not listed on IDEAS
    11. Pierre C. Boyer & Thomas Delemotte & Germain Gauthier & Vincent Rollet & Benoît Schmutz, 2019. "Les déterminants de la mobilisation des "gilets jaunes"," Working Papers 2019-06, Center for Research in Economics and Statistics, revised 26 Jul 2019.
    12. repec:nse:ecosta:ecostat_2018_503-504_5 is not listed on IDEAS
    13. Philippe Frocrain & Pierre-Noël Giraud, 2019. "The Evolution of Tradable and Non Tradable Employment: Evidence from France," Post-Print hal-01981428, HAL.
    14. Philippe Frocrain & Pierre-Noël Giraud, 2017. "The evolution of tradable and non-tradable employment: evidence from France," Working Papers hal-01695159, HAL.
    15. Paul Piveteau & gabriel smagghue, 2018. "The Impact of Chinese Competition along the Quality Ladder," 2018 Meeting Papers 509, Society for Economic Dynamics.
    16. Christian Dippel & Robert Gold & Stephan Heblich & Rodrigo Pinto, 2017. "Instrumental Variables and Causal Mechanisms: Unpacking the Effect of Trade on Workers and Voters," CESifo Working Paper Series 6816, CESifo Group Munich.

    More about this item

    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
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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