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Does Competition from China Raise the Probability of Becoming Unemployed? An Analysis Using Spanish Workers’ Micro-Data

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  • Vicente Donoso
  • Víctor Martín
  • Asier Minondo

    ()

Abstract

In the period 1997–2011, import competition from China multiplied by five in the Spanish manufacturing sector. In this paper we analyze whether this severe increase in import competition from China is associated with a higher probability of becoming unemployed in the Spanish manufacturing sector. Linking industry-level data on imports with the working histories of 141,000 manufacturing workers, we show that import competition from China is positively associated with the probability of becoming unemployed. In particular, a standard deviation increase in import competition from China raises the probability of becoming unemployed between 0.8 and 3.5 % points, which represents between a 9 % and a 44 % increase relative to the unconditional probability of becoming unemployed. In contrast, we do not find any effect of import competition from China on manufacturing wages. Also, our estimations show that there is weak evidence of a positive association between a higher import competition from China and the probability of switching to an employment outside the manufacturing sector. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Vicente Donoso & Víctor Martín & Asier Minondo, 2015. "Does Competition from China Raise the Probability of Becoming Unemployed? An Analysis Using Spanish Workers’ Micro-Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(2), pages 373-394, January.
  • Handle: RePEc:spr:soinre:v:120:y:2015:i:2:p:373-394
    DOI: 10.1007/s11205-014-0597-7
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    References listed on IDEAS

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    Cited by:

    1. Tiago Pereira, 2016. "The effect of developing countries' competition on regional labour markets in Portugal," GEE Papers 0058, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Mar 2016.
    2. Deiana, C, 2016. "Local Labour Market Effects of Unemployment on Crime Induced by Trade Shocks," Economics Discussion Papers 16529, University of Essex, Department of Economics.
    3. David H. Autor & David Dorn & Gordon H. Hanson, 2016. "The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 205-240, October.
    4. David H. Autor & David Dorn & Gordon H. Hanson, 2016. "The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade," CESifo Working Paper Series 5825, CESifo Group Munich.

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    Keywords

    Imports; China; Spain; Unemployment; Skills; Manufacturing;

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