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Increased trade with China and Eastern Europe hardly affects Dutch workers

Author

Listed:
  • Rob Euwals

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • Harro van Heuvelen

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • Gerdien Meijerink

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • Jan Möhlmann

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • Simon Rabaté

    (CPB Netherlands Bureau for Economic Policy Analysis)

Abstract

Contrary to other studies, we find no robust effect of an increase in trade with China and Central European (CEE) countries on local employment, wages and inequality in the Netherlands. If there is an effect, it is small, with positive effects of increased exports counteracting the negative effects of increased imports. One of the reasons why we find different results for the Netherlands is the fact that the Dutch manufacturing industry was already undergoing changes well before the emergence of China and the CEE countries and became less sensitive to import competition from China or the CEE countries. In addition, the Netherlands has collective wage negotiations, which may help to explain that we do not find any effects on wages. While the effect of increased trade with China and the CEE countries on manufacturing jobs is limited, it can create uncertainty for workers. The negative effect of import competition and the positive impact of export opportunities on manufacturing jobs also point to adjustments across industries and regions. Transitioning workers to new types of work can be difficult for these workers, as they are (temporarily) unemployed and may need to move to other regions.

Suggested Citation

  • Rob Euwals & Harro van Heuvelen & Gerdien Meijerink & Jan Möhlmann & Simon Rabaté, 2021. "Increased trade with China and Eastern Europe hardly affects Dutch workers," CPB Discussion Paper 426, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:426
    DOI: 10.34932/mbpy-tm97
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    References listed on IDEAS

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    More about this item

    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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