Competing with the Dragon: Employment and Wage Effects of Chinese Trade Competition in 17 Sectors Across 18 OECD Countries
INET Oxford Working Paper no. 2015-08
34 Pages Posted: 5 Feb 2016
Date Written: December 2015
China’s rapid rise on the global economic stage has substantial and unequal employment and wage effects in advanced industrialised democracies given China’s large volume of low-wage labour. Thus far, these effects have not been analysed in the comparative political economy literature. Building on pooled time-series data, we analyse the effects of Chinese trade competition across 17 sectors in 18 countries. We devote attention to a new channel, increased competition from China in foreign export markets. Our empirical findings reveal overall employment declines in sectors more exposed to Chinese imports. Furthermore, effects on wages and employment are not equally shared across skill levels. For the high-skilled, Chinese competition yields neutral or positive effects whilst the low-skilled bear the brunt.
Keywords: globalisation, export competition, wage inequality, labour markets, sectors
JEL Classification: E24; F14; J30; O33
Suggested Citation: Suggested Citation