Task Trade and the Wage Effects of Import Competition

39 Pages Posted: 13 Jan 2016

See all articles by Abigail Cooke

Abigail Cooke

State University of New York (SUNY) - Buffalo

Thomas Kemney

University of Southampton

David L. Rigby

University of California, Los Angeles (UCLA) - Department of Geography

Date Written: January 01, 2016

Abstract

Do job characteristics modulate the relationship between import competition and the wages of workers who perform those jobs? This paper tests the claim that workers in occupations featuring highly routine tasks will be more vulnerable to low-wage country import competition. Using data from the US Census Bureau, we construct a pooled cross-section (1990, 2000, and 2007) of more than 1.6 million individuals linked to the establishment in which they work. Occupational measures of vulnerability to trade competition – routineness, analytic complexity, and interpersonal interaction on the job – are constructed using O*NET data. The linked employer-employee data allow us to model the effect of low-wage import competition on the wages of workers with different occupational characteristics. Our results show that low-wage country import competition is associated with lower wages for US workers holding jobs that are highly routine and less complex. For workers holding nonroutine and highly complex jobs, increased import competition is associated with higher wages. Finally, workers in occupations with the highest and lowest levels of interpersonal interaction see higher wages, while workers with medium-low levels of interpersonal interaction suffer lower wages with increased low-wage import competition. These findings demonstrate the importance of accounting for occupational characteristics to more fully understand the relationship between trade and wages, and suggest ways in which task trade vulnerable occupations can disadvantage workers even when their jobs remain onshore.

Keywords: Task trade; import competition; wages; globalization; occupational characteristics; trade

Suggested Citation

Cooke, Abigail and Kemney, Thomas and Rigby, David L., Task Trade and the Wage Effects of Import Competition (January 01, 2016). US Census Bureau Center for Economic Studies Paper No. CES-WP- 16-03, Available at SSRN: https://ssrn.com/abstract=2714864 or http://dx.doi.org/10.2139/ssrn.2714864

Abigail Cooke (Contact Author)

State University of New York (SUNY) - Buffalo

12 Capen Hall
Buffalo, NY 14222
United States

Thomas Kemney

University of Southampton ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom

David L. Rigby

University of California, Los Angeles (UCLA) - Department of Geography ( email )

Los Angeles, CA
United States

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