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Trade Shock and Labor Earnings: Difference-in-Differences Evidence from Local Labor Markets

Author

Listed:
  • Oleg Gurshev

    (Group for Research in Applied Economics (GRAPE)
    CASE, Warszawa, Poland
    Faculty of Economic Sciences, University of Warsaw, Warszawa, Poland)

Abstract

This paper investigates the impact of an export demand shock triggered by the 2014 Russian import ban on labor earnings in Poland. We implement an event-study using traditional and doubly-robust difference-in-differences estimators, supplemented by a variance decomposition. Our findings indicate that the shock has caused substantial consequences for regional inequality. Specifically, we document a persistent decline in average relative earnings between the exposed group of counties and the rest of the country. The analysis of between-group variance shows that the import ban has reduced the earnings premium, shifting the exposed counties from relatively higher-earnings positions toward the national average.

Suggested Citation

  • Oleg Gurshev, 2026. "Trade Shock and Labor Earnings: Difference-in-Differences Evidence from Local Labor Markets," GRAPE Working Papers 118, GRAPE Group for Research in Applied Economics.
    • Handle: RePEc:fme:wpaper:118
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    File URL: https://grape.org.pl/WP/118_Gurshev_website.pdf
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    Keywords

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    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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