Made in China, sold in Norway: Local labor market effects of an import shock

Abstract

We analyze whether regional labor markets are affected by exposure to import competition from China. We find negative employment effects for low-skilled workers, and observe that low-skilled workers tend to be pushed into unemployment or leave the labor force altogether. We find no evidence of wage effects. We partly expect this

The impact of China's imports on European Union industrial employment

“…This is in contrast to the US experience, where the employment reduction is concentrated in manufacturing, and explains one-third of the aggregate decline in US manufacturing employment (Autor et al, 2011). As for Norway, Balsvik et al (2014), find that almost 10 percent of the reduction in the manufacturing employment share from 1996 to 2007 can be explained by Ó 2016 The Authors Economics of Transition Ó 2016 The European Bank for Reconstruction and Development increased import competition from China. They argue that this reduction in manufacturing employment primarily affects workers without a college degree, who find themselves partly pushed into unemployment, partly out of the labour force, and partly into employment in other private sectors.…”

“…Further, a large body of literature investigates the rise of trade with China for a single country (Ashournia et al, 2014, Balsvik et al, 2014Donoso et al, 2014;ECB, 2011;Federico, 2012). However, Donoso et al (2014) go even further and analyze this impact across regions.…”

“…However, Norway has a smaller employment share in some of the industries in which Chinese exports have increased the most from the mid-1990s (such as computers and clothing). In addition, the labour market institutions differ markedly between the US and Norway (Balsvik et al, 2014).…”

“…On the other hand, increased exposure to trade with China suggests possible labour-market implications. However, despite such trends, until recently there has been limited evidence finding clear labour market effects of trade shocks (see Balsvik et al, 2014;Krugman, 2008). But, as trade has increased between developed and low-cost countries, in particular China, a number of studies have confirmed labour market effects of trade shocks (Balsvik et al, 2014).…”

“…However, despite such trends, until recently there has been limited evidence finding clear labour market effects of trade shocks (see Balsvik et al, 2014;Krugman, 2008). But, as trade has increased between developed and low-cost countries, in particular China, a number of studies have confirmed labour market effects of trade shocks (Balsvik et al, 2014). Moreover, as China enters traditional European export destination markets and the core segments of European production, it is often seen as a menacing competitor that threatens to crowd out European exporters (Benkovskis et al, 2013).…”