The Impact of Chinese Import Competition on the Local Structure of Employment and Wages: Evidence from France
Clément Malgouyres ()
Working papers from Banque de France
The rapid rise of Chinese exports over the past two decades has raised concerns about manufacturing jobs and wage inequality in high-income countries. Spill-overs beyond the manufacturing sector are an important issue given the large size of the non-traded sector in modern economies as well as the imperfect spatial mobility of households. In this paper, I estimate the impact of Chinese import competition onto the structure of employment and wages of local labor markets in France, with an emphasis on spill-overs effects beyond manufacturing and the degree of local wage inequality. Local employment and total labor income in both manufacturing and non-manufacturing are negatively affected by rising exposure to imports. The estimates imply that each local manufacturing job destroyed by Chinese import competition results in the loss of about 1.5 local job outside of manufacturing. These substantial “local multiplier effects” are however much lower when expressed in terms of hours worked or earnings rather than job count. Import competition from China polarized the local structure of employment in the manufacturing sector. The wage distribution is uniformly negatively affected in manufacturing while the non-traded sector experiences wage polarization, i.e. a rise in upper-tail inequality and a decline in bottom-tail inequality. While overall wage inequality is on average not affected, I show that it increased in response to trade shocks in areas where the minimum wage is only weakly binding.
Keywords: wage distribution; international trade; import competition; local labor markets. (search for similar items in EconPapers)
JEL-codes: F16 J23 J31 R11 R23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-geo, nep-lma and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Downloads: (external link)
https://publications.banque-france.fr/sites/defaul ... g-paper_603_2016.pdf (application/pdf)
Journal Article: THE IMPACT OF CHINESE IMPORT COMPETITION ON THE LOCAL STRUCTURE OF EMPLOYMENT AND WAGES: EVIDENCE FROM FRANCE (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:603
Access Statistics for this paper
More papers in Working papers from Banque de France Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS. Contact information at EDIRC.
Bibliographic data for series maintained by Michael brassart ().