Increased trade with China and Eastern Europe hardly affects Dutch workers

Rob Euwals (), Harro van Heuvelen (), Gerdien Meijerink, Jan Möhlmann () and Simon Rabate
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Rob Euwals: CPB Netherlands Bureau for Economic Policy Analysis
Harro van Heuvelen: CPB Netherlands Bureau for Economic Policy Analysis
Jan Möhlmann: CPB Netherlands Bureau for Economic Policy Analysis

No 426, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: Contrary to other studies, we find no robust effect of an increase in trade with China and Central European (CEE) countries on local employment, wages and inequality in the Netherlands. If there is an effect, it is small, with positive effects of increased exports counteracting the negative effects of increased imports. One of the reasons why we find different results for the Netherlands is the fact that the Dutch manufacturing industry was already undergoing changes well before the emergence of China and the CEE countries and became less sensitive to import competition from China or the CEE countries. In addition, the Netherlands has collective wage negotiations, which may help to explain that we do not find any effects on wages. While the effect of increased trade with China and the CEE countries on manufacturing jobs is limited, it can create uncertainty for workers. The negative effect of import competition and the positive impact of export opportunities on manufacturing jobs also point to adjustments across industries and regions. Transitioning workers to new types of work can be difficult for these workers, as they are (temporarily) unemployed and may need to move to other regions.

JEL-codes: F16 J31 R11 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-cna, nep-eec, nep-geo, nep-int, nep-isf and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:426

DOI: 10.34932/mbpy-tm97

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