The Impact of Chinese Import Competition on Italian Manufactoring

67 Pages Posted: 19 Nov 2021

Date Written: October 12, 2021

Abstract

This paper documents the effects of increased import competition from China on the Italian labour market. In line with recent studies (Autor et al., 2013, 2014), we take two complementary approaches and study the effects on both local labour markets and manufacturing workers. Our analysis shows that Italy’s local labour markets, which were more exposed to Chinese trade because of their industry composition, ended up suffering larger manufacturing and overall employment losses. Nevertheless, back-of-the-envelope calculations suggest that the aggregate effect on total manufacturing employment is modest. At the individual level, contrary to what has been documented for many developed countries, workers initially employed in more exposed manufacturing industries did not suffer long-term losses in terms of lower earnings or more discontinuous careers. While they were indeed less likely than other similar workers to continue working in manufacturing, they were also able to carry out successful transitions towards the non-tradable sector, in other areas with better job opportunities.

Keywords: import competition, Italy, China, manufacturing, local labor market, worker mobility

JEL Classification: F14, F16

Suggested Citation

Citino, Luca and Linarello, Andrea, The Impact of Chinese Import Competition on Italian Manufactoring (October 12, 2021). Bank of Italy Temi di Discussione (Working Paper) No. 1345, Available at SSRN: https://ssrn.com/abstract=3967062 or http://dx.doi.org/10.2139/ssrn.3967062

Luca Citino

Bank of Italy

Via Nazionale 91
Rome, 00184
Italy

Andrea Linarello (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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