The Effect of an Increase in Imports from China on Local Labor Markets in Japan

Abstract

I analyze the effects of increased imports from China on Japanese prefecture- level labor markets from 1995 to 2007. This paper presents evidence that the growth in imports from China positively affected manufacturing employment growth at the prefecture level in Japan. This result is in contrast to the find- ing of Autor, Dorn and Hanson (2013, AER) for local labor markets in the United States. Furthermore, estimations with decomposed types of the imported goods suggest that an increase in intermediate imports mainly caused the positive effects of import growth from China. As for the impact of import growth on the average wage, the results suggest that the effect varies across the first-half and second-half of the sample period, and across intermediate and final goods.

Keywords: International trade, Local labor market, Import competition

JEL Classification: F14, F16, E24