Trade Shocks and Social Mobility: The Intergenerational Effect of Import Competition in Brazil

47 Pages Posted: 7 Nov 2023 Last revised: 16 Feb 2024

See all articles by Andres Cesar

Andres Cesar

National University of La Plata

Matías Ciaschi

Universidad Nacional de La Plata

Guillermo Falcone

National University of La Plata

Guido Neidhöfer

ZEW – Leibniz Centre for European Economic Research

Date Written: 2023

Abstract

This paper investigates whether the impact of trade shocks on employment and wages persists across generations. Using survey data with retrospective information on parental employment, we study the causal effect of increased Chinese import competition in Brazilian industries on individuals with differently exposed fathers. Results show that several years after the shock, children of more exposed fathers have lower education and earnings, lower chances of formal jobs, and are more likely to rely on social assistance. These effects are substantially stronger for children from disadvantaged background, indicating that the shock had a negative impact on intergenerational mobility.

Keywords: I24, J62, F14, F16, J23

JEL Classification: Import competition, Education, Social Mobility, Incomes, Brazil

Suggested Citation

Cesar, Andres and Ciaschi, Matías and Falcone, Guillermo and Neidhöfer, Guido, Trade Shocks and Social Mobility: The Intergenerational Effect of Import Competition in Brazil ( 2023). ZEW - Centre for European Economic Research Discussion Paper No. 23-042, Available at SSRN: https://ssrn.com/abstract=4625858 or http://dx.doi.org/10.2139/ssrn.4625858

Andres Cesar (Contact Author)

National University of La Plata ( email )

La Plata
Argentina

Matías Ciaschi

Universidad Nacional de La Plata ( email )

7 Nº 776
Buenos Aires, BA 1900
Argentina

Guillermo Falcone

National University of La Plata ( email )

La Plata
Argentina

Guido Neidhöfer

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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