Effects of Chinese Imports on Relative Wages: Microevidence from Chile

22 Pages Posted: 24 May 2011

See all articles by Roberto Álvarez

Roberto Álvarez

affiliation not provided to SSRN

Luis Opazo

Central Bank of Chile

Date Written: June 2011

Abstract

The increasing prominence of China in world trade raises important questions about the impact of this on importer countries. In this paper, we address the issue of how import competition from China has affected relative wages in the Chilean manufacturing industry. Using plant‐level data for the period 1996–2005, we find that increasing imports from China have depressed relative wages in sectors with higher Chinese‐import penetration. Our results show a significant reduction of relative wages, between 4 and 25 percent, for those sectors that have experienced the largest increases in Chinese imports. We also find that this effect is particularly strong for small firms, while large firms are unaffected.

Keywords: Import competition, salaries, China, manufacturing plants

JEL Classification: J31, F16, L60

Suggested Citation

Álvarez, Roberto and Opazo, Luis, Effects of Chinese Imports on Relative Wages: Microevidence from Chile (June 2011). Scandinavian Journal of Economics, Vol. 113, Issue 2, pp. 342-363, 2011, Available at SSRN: https://ssrn.com/abstract=1851186 or http://dx.doi.org/10.1111/j.1467-9442.2011.01644.x

Roberto Álvarez

affiliation not provided to SSRN

No Address Available

Luis Opazo (Contact Author)

Central Bank of Chile ( email )

Publicaciones
Huerfanos 1185
Santiago
Chile

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