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Chinese Penetration and Importer Country Wages: Microevidence From Chile

  • Roberto Álvarez
  • Luis Opazo

The increasing importance of China in the world trade raises important questions on its impact on importing countries. This paper studies how import competition from China has affected wages in the Chilean Manufacturing Industry. Using plant-level data for the period 1996-2005, we find that increasing imports from China have tended to depress real wages in manufacturing plants. This negative effect on manufacturing workers is heterogeneous. We find that firms in labor-intensive industries and smaller firms have been quantitatively more affected by Chinese competition. These results hold to correction for sample selection and alternative measures of import competition from low-wages countries.

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Paper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 473.

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Date of creation: Jun 2008
Date of revision:
Handle: RePEc:chb:bcchwp:473
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  1. Roberto Álvarez; & Sebastián Claro, 2008. "David Versus Goliath: The Impact of Chinese Competition on Developing Countries," Working Papers Central Bank of Chile 478, Central Bank of Chile.
  2. Aitken, Brian & Harrison, Ann & Lipsey, Robert E., 1996. "Wages and foreign ownership A comparative study of Mexico, Venezuela, and the United States," Journal of International Economics, Elsevier, vol. 40(3-4), pages 345-371, May.
  3. Andrew B. Bernard & J. Bradford Jensen, 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," NBER Working Papers 6272, National Bureau of Economic Research, Inc.
  4. Jonathan E. Haskel & Matthew J. Slaughter, 2000. "Have Falling Tariffs and Transportation Costs Raised U.S. Wage Inequality?," NBER Working Papers 7539, National Bureau of Economic Research, Inc.
  5. Revenga, Ana, 1997. "Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S20-43, July.
  6. Andrew Bernard & J. Bradford Jensen & Peter Schott, 2003. "Survival of the best fit: exposure to low-wage countries and the (uneven) growth of US manufacturing plants," IFS Working Papers W03/12, Institute for Fiscal Studies.
  7. Peter K. Schott, 2001. "One Size Fits All? Heckscher-Ohlin Specialization in Global Production," NBER Working Papers 8244, National Bureau of Economic Research, Inc.
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