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Adjusting to Globalization - Evidence from Worker-Establishment Matches in Germany

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  • Dauth, Wolfgang
  • Findeisen, Sebastian
  • Südekum, Jens

Abstract

This paper addresses the impact of rising international trade exposure on individual earnings profiles in heterogeneous worker-establishment matches. We exploit rich panel data on job biographies of manufacturing workers in Germany, and apply a high-dimensional fixed effects approach to analyze endogenous mobility between plants, industries, and regions in response to trade shocks. Rising import penetration reduces earnings within job spells, and it induces workers to leave the exposed industries. Intra-industry mobility to other firms or regions are far less common adjustments. This induced industry mobility mitigates the adverse impacts of import shocks in the workers' subsequent careers, but their cumulated earnings over a longer time horizon are still negatively affected. By contrast, we find much less evidence for sorting into export-oriented industries, but the earnings gains mostly arise within job spells. These results point at an asymmetry in the individual labour market response to trade shocks: Import shocks trigger substantial "push effects", whereas the "pull effects" of export shocks are weaker.

Suggested Citation

  • Dauth, Wolfgang & Findeisen, Sebastian & Südekum, Jens, 2016. "Adjusting to Globalization - Evidence from Worker-Establishment Matches in Germany," Annual Conference 2016 (Augsburg): Demographic Change 145522, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc16:145522
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    References listed on IDEAS

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    Cited by:

    1. Nimczik, Jan Sebastian, 2017. "Job Mobility Networks and Endogenous Labor Markets," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168147, Verein für Socialpolitik / German Economic Association.
    2. Goeddeke, Anna & Haucap, Justus & Herr, Annika & Wey, Christian, 2017. "Flexibility in wage setting under the threat of relocation," DICE Discussion Papers 269, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    3. Dauth, Wolfgang & Findeisen, Sebastian & Südekum, Jens & Wößner, Nicole, 2017. "German robots - the impact of industrial robots on workers," IAB Discussion Paper 201730, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Irlacher, Michael & Baumgarten, Daniel & Koch, Michael, 2017. "Short- versus long-run effects of offshoring when sectors are heterogeneous," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168272, Verein für Socialpolitik / German Economic Association.
    5. repec:bla:labour:v:32:y:2018:i:1:p:1-22 is not listed on IDEAS

    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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