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Adjusting to Globalization in Germany

Author

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  • Wolfgang Dauth

    ()

  • Sebastian Findeisen

    ()

  • Jens Suedekum

    ()

Abstract

We study the impact of trade exposure on the job biographies of 2.4 million manufacturing workers in Germany. Rising export opportunities lead to two equally important sources of earnings gains: on-the-job, and via employer switches within the same industry. Highly skilled workers benefit the most. Import shocks mostly hurt lowskilled workers, especially when they possess lots of industry-specific human capital. They also destroy workers’ rents when separating from high-wage plants, and they leave strongly scarring effects in the event of a mass layoff. We connect our results to the growing theoretical literature on the labor market effects of trade.

Suggested Citation

  • Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum, 2019. "Adjusting to Globalization in Germany," CRC TR 224 Discussion Paper Series crctr224_2019_118, University of Bonn and University of Mannheim, Germany.
  • Handle: RePEc:bon:boncrc:crctr224_2019_118
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    File URL: https://www.crctr224.de/en/research-output/discussion-papers/discussion-papers#DP118
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    References listed on IDEAS

    as
    1. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum, 2014. "The Rise Of The East And The Far East: German Labor Markets And Trade Integration," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1643-1675, December.
    2. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    3. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum, 2017. "Trade and Manufacturing Jobs in Germany," American Economic Review, American Economic Association, vol. 107(5), pages 337-342, May.
    4. Elhanan Helpman, 2016. "Globalization and Wage Inequality," NBER Working Papers 22944, National Bureau of Economic Research, Inc.
    5. Muendler, Marc-Andreas, 2017. "Trade, technology, and prosperity: An account of evidence from a labor-market perspective," WTO Staff Working Papers ERSD-2017-15, World Trade Organization (WTO), Economic Research and Statistics Division.
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    Cited by:

    1. Colantone, Italo & Crinò, Rosario & Ogliari, Laura, 2019. "Globalization and mental distress," Journal of International Economics, Elsevier, vol. 119(C), pages 181-207.
    2. Huber, Katrin & Winkler, Erwin, 2019. "All you need is love? Trade shocks, inequality, and risk sharing between partners," European Economic Review, Elsevier, vol. 111(C), pages 305-335.
    3. Mertens, Matthias, 2019. "Micro-mechanisms behind declining labour shares: Market power, production processes, and global competition," IWH-CompNet Discussion Papers 3/2019, Halle Institute for Economic Research (IWH).
    4. Sebastian Findeisen & Wolfgang Dauth & Jens Suedekum & Nicole Woessner, 2018. "Adjusting to Robots: Worker-Level Evidence," Opportunity and Inclusive Growth Institute Working Papers 13, Federal Reserve Bank of Minneapolis, revised 21 Aug 2018.

    More about this item

    Keywords

    Trade Adjustments; Worker Mobility; Frictional Labor Markets;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • 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

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