Rising Import Competition in Canada and its Employment Effect by Skill Group: Evidence from the 'China Shock'

Myeongwan Kim

No 2018-02, CSLS Research Reports from Centre for the Study of Living Standards

Abstract: It is well known that there has been a secular decline in the manufacturing share of total employment in Canada, with the decline accelerating after 2000. Among the factors that contributed to that trend, this report focuses on rising Chinese import competition in Canada, which also accelerated after 2000. We find that the trade-induced job loss in manufacturing amounts to 113.5 thousand during the 2001-2011 period but the loss was not equally distributed across skill groups. We estimate that the loss was largely driven by: low-skilled occupations (89.8 thousand) when analyzed by skill level; and occupations in services (57.6 thousand), technical/paraprofessional (12.1 thousand), and production (51.8 thousand) when analyzed by skill type. We also find that the labour reallocation in response to a trade shock is important in offsetting the negative employment effect, but the degree of adjustment is found to vary across skill groups.

Keywords: import competition; China shock; manufacturing employment; skill groups; trade-induced job loss; labour reallocation; Canada; occupational skill (search for similar items in EconPapers)
Date: 2018-08
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