The Impact of Chinese Import Competition on the Local Structure of Employment and Wages: Evidence from France

31 Pages Posted: 21 Jun 2017

See all articles by Clément Malgouyres

Clément Malgouyres

Paris School of Economics (PSE); Institut des politiques publiques (PSE)

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Date Written: June 2017

Abstract

The rapid rise of Chinese exports over the past two decades has raised concerns about manufacturing jobs and wage inequality in high‐income countries. spillovers beyond the manufacturing sector are an important issue given the large size of the nontraded sector in modern economies as well as the imperfect spatial mobility of households. In this paper, I estimate the impact of Chinese import competition onto the structure of employment and wages of local labor markets in France, with an emphasis on spillovers effects beyond manufacturing and the degree of local wage inequality. Local employment and total labor income in both manufacturing and nonmanufacturing are negatively affected by rising exposure to imports. Import competition from China polarized the local structure of employment in the manufacturing sector. The wage distribution is uniformly negatively affected in manufacturing while the nontraded sector experiences wage polarization, i.e., a rise in upper‐tail inequality and a decline in bottom‐tail inequality. While overall wage inequality is on average not affected, I show that it increased in response to trade shocks in areas where the minimum wage is only weakly binding.

Suggested Citation

Malgouyres, Clément, The Impact of Chinese Import Competition on the Local Structure of Employment and Wages: Evidence from France (June 2017). Journal of Regional Science, Vol. 57, Issue 3, pp. 411-441, 2017. Available at SSRN: https://ssrn.com/abstract=2990120 or http://dx.doi.org/10.1111/jors.12303

Clément Malgouyres (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Institut des politiques publiques (PSE) ( email )

48 boulevard Jourdan
Paris, 75014
France

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