Skip to main content

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

  • Stefan Thewissen and Olaf van Vliet

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.

  • View HTML
    • Send article to Kindle

      To send this article to your Kindle, first ensure is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle. Find out more about sending to your Kindle.

      Note you can select to send to either the or variations. ‘’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

      Find out more about the Kindle Personal Document Service.

      Competing With the Dragon: Employment Effects of Chinese Trade Competition in 17 Sectors Across 18 OECD Countries*
      Available formats
      Send article to Dropbox

      To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Dropbox.

      Competing With the Dragon: Employment Effects of Chinese Trade Competition in 17 Sectors Across 18 OECD Countries*
      Available formats
      Send article to Google Drive

      To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Google Drive.

      Competing With the Dragon: Employment Effects of Chinese Trade Competition in 17 Sectors Across 18 OECD Countries*
      Available formats
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (, which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
Hide All

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 ( Olaf van Vliet is an Associate Professor at the Department of Economics, Leiden University, Steenschuur 25, 2311 ES Leiden ( 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

Hide All
Armingeon, Klaus, Knöpfel, Laura, Weisstanner, David, and Engler, Sarah. 2012. Comparative political data set III 1990-2012. Bern: University of Bern.
Autor, David, Dorn, David, and Hanson, Gordon. 2013. ‘The China syndrome: Local labor market effects of import competition in the United States’. American Economic Review 103(6):21212168.
Autor, David, Dorn, David, and Hanson, Gordon. 2015. ‘Untangling trade and technology: Evidence from local labor markets’. The Economic Journal 125(584):621646.
Balsvik, Ragnhild, Jensen, Sissel, and Salvanes, Kjell. 2015. ‘Made in China, sold in Norway: Local labor market effects of an import shock’. Journal of Public Economics 127:137144.
Barro, Robert, and Lee, Jong-Wha. 2015. Barro-Lee educational attainment data, July 2015 update,, accessed 3 March 2014.
Beck, Nathaniel, and Katz, Jonathan. 2011. ‘Modeling dynamics in time-series-cross-section political economy data’. Annual Review of Political Science 14:331352.
Bloom, Nicholas, Draca, Mirko, and Van Reenen, John. 2016. ‘Trade induced technical change? The impact of Chinese imports on diffusion, innovation, and productivity’. Review of Economic Studies 83(1):87117.
Breitung, Joerg. 2015. ‘The analysis of macroeconomic panel data’. In: Badi H. Baltagi ((ed.)), The Oxford handbook of panel data, 453492. Oxford: Oxford University Press.
Checchi, Daniele, García-Peñalosa, Cecilia, and Vivian, Lara. 2016. ‘Are changes in the dispersion of hours worked a cause of increased earnings inequality?’. IZA Journal of European Labor Studies 5(15):134.
Clay, K. Chad, and Digiuseppe, Matthew R.. 2016. The physical consequences of fiscal flexibility: Sovereign debt and physical integrity right, British Journal of Political Science, 47(4):783807.
Dancygier, Rafaela, and Walter, Stefanie. 2015. ‘Globalization, labor market risks, and class cleavages’. In: Pablo Beramendi, Silja Häusermann, Herbert Kitschelt and Hanspeter Kriesi ((eds.)), The politics of advanced capitalism, pp. 133156. Cambridge: Cambridge University Press.
De Boef, Suzanna, and Keele, Luke. 2008. ‘Taking time seriously’. American Journal of Political Science 52(1):184200.
DiGiuseppe, Matthew R. 2015. ‘Guns, butter and debt: Sovereign creditworthiness and military expenditure’. Journal of Peace Research 52(5):680693.
EU-KLEMS. 2007. EU KLEMS Growth and Productivity Accounts (Versions 1.0, November 2009, March 2011), accessed 3 March 2014.
Frey, Carl Benedikt, and Osborne, Michael. 2013. The future of employment: How susceptible are jobs to computerisation?, Oxford Martin School Working Paper, Oxford
Goldin, Claudia, and Katz, Lawrence. 2008. The race between education and technology. Cambridge: Harvard University Press.
Grant, Taylor, and Matthew, J. Lebo. 2016. ‘Error correction models with political time series’. Political Analysis 24(1):330.
Hays, Jude. 2009. Globalization and the new politics of embedded liberalism. Oxford: Oxford University Press.
Huber, Evelyne, and Stephens, John. 2014. ‘Income inequality and redistribution in post-industrial democracies: demographic, economic and political determinants’. Socio-Economic Review 12(2):245267.
Iversen, Torben, and Wren, Anne. 1998. ‘Equality, Employment and budgetary restraint: The trilemma of the service economy’. World Politics 50(4):507546.
Johnson, Gregg B., and Schwindt-Bayer, Leslie A.. 2009. ‘Economic Accountability in Central America’. Journal of Politics in Latin America 1(3):3356.
Keele, Luke, Linn, Suzanna, and Webb, Clayton. 2016. ‘Treating Time with all Due Seriousness’. Political Analysis 24(1):3141.
Koeniger, Winfried, Leonardi, Marco, and Nunziata, Luca. 2007. ‘Labor market institutions and wage inequality’. Industrial and Labor Relations Review 60(3):340356.
Mahler, Vincent. 2004. ‘Economic globalization, domestic politics, and income inequality in the developed countries: A cross-national study’. Comparative Political Studies 37(9):10251053.
Mahler, Vincent, Jesuit, David, and Roscoe, Douglas. 1999. ‘Exploring the impact of trade and investment on income inequality: A cross-national sectoral analysis of the developed countries’. Comparative Political Studies 32(3):363395.
Massari, Riccardo, Naticchioni, Paolo, and Ragusa, Giuseppe. 2013. ‘Unconditional and conditional wage polarization in Europe’. NEUJOBS Working Paper no. D3.6, Rome.
Melitz, Marc. 2003. ‘The impact of trade on intra-industry reallocations and aggregate industry productivity’. Econometrica 71(6):16951725.
Michaels, Guy, Natraj, Ashwini, and Van Reenen, John. 2014. ‘Has ICT polarized skill demand? Evidence from eleven countries over 25 years’. Review of Economics and Statistics 96(1):6077.
Nickell, Stephen. 1981. ‘Biases in dynamic models with fixed effects’. Econometrica 49(6):14171426.
OECD. 2011a. Divided we stand: Why inequality keeps rising. Paris: OECD.
OECD. 2011b. STAN structural analysis database. Paris: OECD.
OECD. 2012. Policy priorities for international trade and jobs. Paris: OECD.
OECD. 2014a. Indicators of employment protection. Paris: OECD.
OECD. 2014b. Labour force statistics. Paris: OECD.
OECD. 2014c. National accounts. Paris: OECD.
OECD. 2014d. International direct investment database. Paris: OECD.
Oesch, Daniel. 2013. Occupational change in Europe: How technology & education transform the job structure . Oxford: Oxford University Press.
Oliver, Rebecca. 2008. ‘Diverging developments in wage inequality: Which institutions matter?’. Comparative Political Studies 41(12):15511582.
Philips, Andrew Q., Rutherford, Amanda, and Whitten, Guy D.. 2016. ‘Dynamic pie: A strategy for modeling trade-offs in compositional variables over time’. American Journal of Political Science 60(1):268283.
Pontusson, Jonas, Rueda, David, and Way, Christopher. 2002. ‘Comparative political economy of wage distribution: The role of partisanship and labour market institutions’. British Journal of Political Science 32(2):281308.
Rehm, Philipp. 2009. ‘Risks and redistribution: An individual-level analysis’. Comparative Political Studies 42(7):855881.
Rueda, David, and Pontusson, Jonas. 2000. ‘Wage inequality and varieties of capitalism’. World Politics 52(3):350383.
Samuelson, Paul. 1971. ‘Ohlin was Right’. Swedish Journal of Economics 73(4):365384.
Stolper, Wolfgang, and Paul, Samuelson. 1941. ‘Protection and real wages’. Review of Economic Studies 9(1):5873.
Thewissen, Stefan. 2014. ‘Is it the income distribution or redistribution that affects growth?’. Socio-Economic Review 12(3):545571.
Thewissen, Stefan, van Vliet, Olaf, and Wang, Chen. 2017. Taking the Sector Seriously: Data, Developments and Drivers of Intrasectoral Earnings Inequality, Social Indicators Research, forthcoming (doi: 10.1007/s11205-017-1677-2).
Van Vliet, Olaf, and Caminada, Koen. 2012. Unemployment replacement rates dataset among 34 welfare states 1971-2009: An update, extension, and modification of the Scruggs’ welfare state entitlements data set, NEUJOBS Special Report No. 2, Leiden University, Leiden.
Visser, Jelle. 2013. ICTWSS: Database on institutional characteristics of trade unions, wage setting, state intervention and social pacts in 34 countries between 1960 and 2012 version 4,, accessed 3 March 2014.
Wallerstein, Michael. 1999. ‘Wage setting institutions and pay inequality in advanced industrial societies’. American Journal of Political Science 43(3):649680.
Walter, Stefanie. 2010. ‘Globalization and the welfare state: Testing the microfoundations of the compensation hypothesis’. International Studies Quarterly 54(2):403426.
Williams, Laron K., and Whitten, Guy D.. 2012. ‘But wait, there’s more! Maximizing substantive inferences from TSCS models’. Journal of Politics 74(3):685693.
Wren, Anne. 2013. ‘Introduction: The political economy of post-industrial societies’. In: Anne Wren ((ed.)), The political economy of the service transition, 170. Oxford: Oxford University Press.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Political Science Research and Methods
  • ISSN: 2049-8470
  • EISSN: 2049-8489
  • URL: /core/journals/political-science-research-and-methods
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
Type Description Title
Supplementary materials

Thewissen and van Vliet supplementary material 1
Thewissen and van Vliet supplementary material

 Word (233 KB)
233 KB
Supplementary materials

Thewissen and van Vliet Dataset



Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed