The Heterogeneous Effects of Trade across Occupations: A Test of the Stolper-Samuelson Theorem

Sergi Basco, Maxime Liégey (), Martí Mestieri and Gabriel Smagghue ()
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Maxime Liégey: http://www.beta-umr7522.fr/-LIEGEY-Maxime-?lang=fr

No WP-2020-24, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: This paper develops and implements a novel test of the Stolper-Samuelson theorem. We use nationally-representative matched employer-employee panel data from 1997 through 2015 to study the effect of the rise in China’s exports on French worker earnings. Our version of the Stolper-Samuelson theorem states that there is a negative correlation between occupation exposure to Chinese competition and change in worker earnings. First, we document substantial heterogeneity in trade adjustment across occupations. Then, consistent with the Stolper-Samuelson prediction, we show that workers initially employed in occupations more intensively used in hard-hit industries experience larger declines in earnings. We also show that workers tend to move out of hard-hit industries, but they tend to remain in their initial occupation.

Keywords: Stolper-Samuelson Theorem; Earnings Inequality; Trade and Inequality (search for similar items in EconPapers)
JEL-codes: F11 F14 F16 (search for similar items in EconPapers)
Pages: 54
Date: 2020-10-23
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Working Paper: The Heterogeneous Effects of Trade across Occupations: A Test of the Stolper-Samuelson Theorem (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedhwp:92685

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DOI: 10.21033/wp-2020-24

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