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Trade diversion and labor market adjustment: Vietnam and the U.S.-China trade war

Author

Listed:
  • Karin Mayr-Dorn

    (JKU Linz)

  • Gaia Narciso

    (Trinity College Dublin)

  • Duc Anh Dang

    (NCIF)

  • Hien Phan

    (NCIF)

Abstract

This paper investigates the effects of the U.S.-China trade war on trade diversion and the labor market outcomes in a third country, Vietnam. We exploit variation in Vietnamese exports following the unexpected and exogenous U.S. tariff hikes on Chinese imports and find that Vietnamese workers and districts more exposed to the trade war display higher employment, longer working hours, and higher wages as a result of the U.S.-China trade war. The effects are mainly driven by women and non-college-educated individuals. Our findings reveal that bilateral trade policies can have substantial spillover effects on trade flows and labor markets in third countries.

Suggested Citation

  • Karin Mayr-Dorn & Gaia Narciso & Duc Anh Dang & Hien Phan, 2023. "Trade diversion and labor market adjustment: Vietnam and the U.S.-China trade war," Trinity Economics Papers tep0923, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcduee:tep0923
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    More about this item

    Keywords

    trade diversion; trade war;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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