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How Import Competition Affects Displaced Workers in the U.S

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  • Kandilov Ivan T

    (North Carolina State University at Raleigh)

Abstract

I use the Displaced Worker Survey and bilateral trade data to assess the impact of import competition from low-wage countries on displaced workers' unemployment duration and re-employment wages. While low-wage imports have almost no effect on unemployment duration for workers displaced from an industry with the average length of the quality ladder, I find that a ten percentage point increase in low-wage imports leads to a 5.6 week longer jobless spell duration for workers displaced from an industry with a short quality ladder. Similarly, a ten percentage point increase in low-wage imports leads to a 7.2 percent decline in re-employment wages for workers displaced from an average ladder industry, but it leads to an 11.3 percent decline in re-employment wages for workers displaced from a short ladder industry. I show evidence that greater low-wage imports raise the likelihood of sectoral relocation upon re-employment, leading to loss of sector specific human capital.

Suggested Citation

  • Kandilov Ivan T, 2010. "How Import Competition Affects Displaced Workers in the U.S," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-39, June.
    • Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:49
    DOI: 10.2202/1935-1682.2048
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    Cited by:

    1. Pierre Brochu & Louis-Philippe Morin, 2011. "Union Membership and Perceived Job Insecurity: 30 Years of Evidence from the American General social Survey," Working Papers 1106E, University of Ottawa, Department of Economics.
    2. Pierre Brochu & Louis-Philippe Morin, 2012. "Union Membership and Perceived Job Insecurity: Thirty Years of Evidence from the American General Social Survey," ILR Review, Cornell University, ILR School, vol. 65(2), pages 263-285, April.
    3. Kang Youngho & Im Hyejoon, 2016. "Import Competition and Post-displacement Wages in Korea: Whom You Trade with Matters," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(4), pages 1-6, October.

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