International Trade and UK De-Industrialisation

Abstract

The past 25 years have been characterised by a surge in international trade as economies have become increasingly inter-linked. In many advanced economies this surge has been associated with increased import competition from low-wage economies. This paper explores the effects of such competition on manufacturing jobs in the UK. We consider two developments that influenced the nature of international trade: the ascendency of China as an important player in global markets and the accession to the European Union of a number of Eastern European economies in 2004. Both of these changes were associated with a shift in trade regimes and led to a sharp rise in import competition in particular UK manufacturing sectors. We find that these changes are likely to have hastened the decline of UK manufacturing.

Trade and Inequality in Europe and the Us

“…Reduced-form analyses of geographic regions have been used to study the labour market impacts of Chinese import competition in many developed economies, including the UK (Foliano and Riley, 2017), Germany (Dauth, Findeisen and Suedekum, 2014), France (Malgouyres, 2017a), Italy (Citino and Linarello, 2019), Spain , Norway (Balsvik, Jensen and Salvanes, 2015) and the US (Autor, Dorn and Hanson, 2013a). These studies produce three common findings.…”

“…To investigate the reaction of a country's labour market to a trade shock of a given magnitude more systematically, we next study results from comparable local labour market analyses from the UK (Foliano and Riley, 2017), Germany (Dauth, Findeisen and Suedekum, 2014), Spain , Norway (Balsvik, Jensen and Salvanes, 2015) and the US (Autor, Dorn and Hanson, 2013a). A common feature of these studies is that they estimate the impact of Chinese import competition (measured in thousand dollars of imports per worker) on the share of a country's working-age population that is employed in manufacturing.…”

The Drivers of Income Inequality in Rich Countries

“…For further examples with more or less similar results, see Balsvik et al . () for Norway, Crozet and Orefice () for France, Foliano and Riley () for the United Kingdom and Nilsson Hakkala and Huttunen () for Finland.…”

Understanding 2016: China, Brexit and Trump in the history of uneven and combined development

“…Between 2000 and 2007, the number of manufacturing jobs in the U.S. shrank by one‐fifth (3.6 million), while manufacturing employment in Britain fell by over one‐quarter, with a loss of almost a million jobs (Berger & Martin, :14; Rhodes, :7). Analysis suggested that China's export surge was responsible for one‐quarter of U.S. manufacturing job losses over the period 1990 to 2007, and from one‐fifth to one‐third of the decline in Britain between 2000 and 2015 (Autor et al, ; Foliano & Riley, :R11).…”