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Competing With the Dragon: Employment Effects of Chinese Trade Competition in 17 Sectors Across 18 OECD Countries*

Abstract

China’s rapid rise on the global economic stage has substantial and unequal employment effects in advanced industrialized democracies given China’s large volume of low-wage labor. Thus far, these effects have not been analyzed in the comparative political economy literature. Building on pooled time-series data, we analyze the effects of Chinese trade competition across 17 sectors in 18 countries. We devote attention to a new channel, increased competition from China in foreign export markets. Our empirical findings reveal overall employment declines in sectors more exposed to Chinese imports. Furthermore, our results suggest that employment effects are not equally shared across skill levels, as the share of hours worked worsens for low-skilled workers.

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This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
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Stefan Thewissen is a Postdoctoral Research Officer at the Department of Social Policy and Intervention, Institute for New Economic Thinking, and Nuffield College, University of Oxford, Walton Well Road, Oxford OX2 6ED; and a guest staff member at the Department of Economics, Leiden University (stefan.thewissen@spi.ox.ac.uk). Olaf van Vliet is an Associate Professor at the Department of Economics, Leiden University, Steenschuur 25, 2311 ES Leiden (o.p.van.vliet@law.leidenuniv.nl). Earlier versions of this paper were presented at the 7th ECPR-SGEU conference in The Hague, 5–7 June 2014, the LIS Summer Workshop in Luxembourg, 29 June to 5 July 2014, the 26th SASE Annual Conference in Chicago, 10–12 July 2014, the 73rd MPSA Annual Conference in Chicago, 16–19 April 2015, and the IBS Jobs Conference in Warsaw, 27–28 October 2015. The authors thank all the participants, Ben Ansell, Michael Blauberger, Koen Caminada, Robert Chalwell, Kees Goudswaard, Brian Nolan, John Peters, David Rueda, Vera Troeger, and two anonymous referees for their helpful comments and suggestions. All errors remain the authors. To view supplementary material and Harvard Dataverse information for this article, please visit https://doi.org/10.1017/psrm.2017.35

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