 The labor market effects of the China Syndrome: Evidence from South Korean manufacturingJaerim Choi () and Mingzhi (Jimmy) Xu The World Economy, 2020, vol. 43, issue 11, 3039-3087 Abstract: We evaluate the direct impact of China trade shock on the Korean labour market following the approach of Acemoglu, Autor, Dorn, Hanson, and Price (Journal of Labor Economics, 2016, 34, S1). Using firm‐ and industry‐level data for the period 1993–2013, our direct estimates imply that the net employment effect of the China shock in the manufacturing sector is the creation of 0.52 million jobs. The positive impact is mostly driven by China's rising demand for intermediate inputs and capital goods from Korea to support its export expansion to the global economy. The import‐competition channel plays a negligible role in manufacturing employment because it creates temporary jobs that merely compensate for the loss in permanent jobs. By contrast, over the same period, the average wage declined by 2.4%, and income inequality, measured as the gap between the high‐ and low‐income quantile, grew substantially in manufacturing. In addition, we find that the direct effect of China shock lowers labour market concentration by shifting workers from big firms to small‐ and medium‐sized firms. Date: 2020 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:43:y:2020:i:11:p:3039-3087 Ordering information: This journal article can be ordered from Access Statistics for this article The World Economy is currently edited by David Greenaway More articles in The World Economy from Wiley Blackwell |
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