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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
    DOI: 10.1111/jors.12303
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    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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