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Adjusting to Globalization in Germany

Author

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  • Dauth, Wolfgang

    () (Institut für Arbeitsmarkt- und Berufsforschung)

  • Findeisen, Sebastian

    () (University of Konstanz)

  • Suedekum, Jens

    () (Heinrich Heine University Düsseldorf)

Abstract

We study the impact of trade exposure in the job biographies, measured with daily accuracy, of 2.4 million workers in Germany. To profit from export opportunities, workers adjust through increased employer switching. Highly skilled workers benefit the most, consistent with an increase in skill demand. The incidence of import shocks falls mostly on low-skilled workers, as they are not able to adjust as well as medium- and high-skilled workers. Imports also destroy rents by workers at high-wage plants who separate from their original firm. We connect our results to the growing theoretical literature on the labor market effects of trade.

Suggested Citation

  • Dauth, Wolfgang & Findeisen, Sebastian & Suedekum, Jens, 2018. "Adjusting to Globalization in Germany," IZA Discussion Papers 11299, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11299
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. 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.
    4. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    5. Elhanan Helpman, 2016. "Globalization and Wage Inequality," NBER Working Papers 22944, National Bureau of Economic Research, Inc.
    6. Tanja Hethey-Maier & Johannes F. Schmieder, 2013. "Does the Use of Worker Flows Improve the Analysis of Establishment Turnover? Evidence from German Administrative Data," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 133(4), pages 477-510.
    7. 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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    Citations

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    Cited by:

    1. Rafael Dix-Carneiro & Ricardo Reyes-Heroles & Sharon Traiberman, 2018. "Globalization, Trade Imbalances, and Labor Market Adjustment," 2018 Meeting Papers 890, Society for Economic Dynamics.
    2. Kölling, Arnd & Mertens, Antje, 2020. "Exporting behavior and the demand for skills in German establishments," Working Papers 97, Berlin School of Economics and Law, Institute of Management Berlin (IMB).
    3. Borrs, Linda & Knauth, Florian, 2021. "Trade, technology, and the channels of wage inequality," European Economic Review, Elsevier, vol. 131(C).
    4. Colantone, Italo & Crinò, Rosario & Ogliari, Laura, 2019. "Globalization and mental distress," Journal of International Economics, Elsevier, vol. 119(C), pages 181-207.
    5. 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).
    6. Sónia Cabral & Pedro S. Martins & João Pereira dos Santos & Mariana Tavares, 2021. "Collateral Damage? Labour Market Effects of Competing with China—at Home and Abroad," Economica, London School of Economics and Political Science, vol. 88(350), pages 570-600, April.
    7. Christian Dustmann, 2021. "Trade, Labor Markets, and the China Shock: What Can Be Learned from the German Experience?," CReAM Discussion Paper Series 2112, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    8. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum & Nicole Woessner, 2018. "Adjusting to Robots: Worker-Level Evidence," Opportunity and Inclusive Growth Institute Working Papers 13, Federal Reserve Bank of Minneapolis.
    9. 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.

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    More about this item

    Keywords

    work biographies; individual labor market responses; international trade; worker mobility; Germany;
    All these keywords.

    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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