Trade Shocks and Social Mobility: The Intergenerational Effect of Import Competition in Brazil
47 Pages Posted: 7 Nov 2023 Last revised: 16 Feb 2024
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
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