Worker and firm responses to trade shocks: the UK-China case

De Lyon, Joshua and Pessoa, João Paulo (2021) Worker and firm responses to trade shocks: the UK-China case. CEP Discussion Papers (1741). Centre for Economic Performance, LSE, London, UK.

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Abstract

We exploit the recent surge in Chinese export growth to study the effects of a trade shock on workers and firms in a foreign market, the UK, in the period 2000-2007. We find that individuals initially employed in sectors highly exposed to growth in imports from China experienced lower income growth and remained out of employment longer than workers in sectors that were less exposed to import competition. The effects are heterogeneous, with initially lower-paid workers suffering more in terms of employment and earnings than those initially better-paid, and female workers experiencing a greater relative fall in total earnings than males, mostly through reduced years of employment. Plants in industries more exposed to Chinese products displayed lower employment growth and higher probability of going out of business than plants in sectors more insulated from competition with China, with stronger effects for larger plants.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2021 The Authors
Divisions:	Centre for Economic Performance
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce
JEL classification:	F - International Economics > F1 - Trade > F14 - Country and Industry Studies of Trade F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J60 - General
Date Deposited:	08 Mar 2022 15:15
Last Modified:	15 Sep 2023 23:56
URI:	http://eprints.lse.ac.uk/id/eprint/114281

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