Worker-Level Consequences of Import Shocks

VATT Institute for Economic Research Working Papers No. 74

49 Pages Posted: 26 May 2016

See all articles by Katariina Nilsson Hakkala

Katariina Nilsson Hakkala

Government of the Republic of Finland - VATT Institute for Economic Research

Kristiina Huttunen

Aalto University - Department of Economics

Date Written: May 16, 2016

Abstract

We analyse the effects of imports on employment and earnings by distinguishing between import competition in final products and firms’ use of imports in production (offshoring). We use Finnish worker-firm data merged with product-level trade data. We focus on Chinese imports and instrument them by changes in China’s share of world exports. Both types of importing increase the job loss risk for all workers and, in particular, for workers in production occupations. An increase in import competition has larger negative effects than an increase in offshoring. Production workers suffer the largest earnings losses, while for high-skilled workers the wage-effect is positive.

Keywords: Offshoring, Import Competition, Employment, Earnings

JEL Classification: F160, J230, J310, J630, L240

Suggested Citation

Nilsson Hakkala, Katariina and Huttunen, Kristiina, Worker-Level Consequences of Import Shocks (May 16, 2016). VATT Institute for Economic Research Working Papers No. 74, Available at SSRN: https://ssrn.com/abstract=2780833 or http://dx.doi.org/10.2139/ssrn.2780833

Katariina Nilsson Hakkala (Contact Author)

Government of the Republic of Finland - VATT Institute for Economic Research ( email )

Arkadiankatu 7
P.O Box 1279
Helsinki, FIN-00531
Finland

Kristiina Huttunen

Aalto University - Department of Economics ( email )

PO Box 1210
FI-00101 Helsinki
Finland

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
47
Abstract Views
431
PlumX Metrics