The effect of import competition on labor income inequality through firm and worker heterogeneity in the Japanese manufacturing sector

Masahiro Endoh

Japan and the World Economy, 2021, vol. 59, issue C

Abstract: This study estimates the effects of import competition from Asia on the labor income inequality of Japanese manufacturing workers, considering firm and worker heterogeneity. Parameters are obtained from regression results of annual salary by using constructed worker–establishment panel data. The estimated salary change is positively and negatively larger for higher- and lower-paid workers, respectively, implying that labor income inequality among industry–size–skill–gender groups has increased due to imports from Asia. However, the actual evolution of income inequality during 1998–2014 is not successfully explained by Asian imports: other shocks overshadow import competition to determine actual income inequality.

Keywords: Firm size; Gender; Heterogeneity; Import competition; Inequality; Labor income; Skill (search for similar items in EconPapers)
JEL-codes: F16 F66 J31 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:59:y:2021:i:c:s0922142521000232

DOI: 10.1016/j.japwor.2021.101076

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