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Distributional effect of import shocks on British local labour markets
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Distributional effect of import shocks on British local labour markets

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  • Anwar S Adem

Abstract

This article investigates the causal effect of import shocks on the wage distribution using individual-level data from the UK in the period 1997–2010. The analysis exploits regional variation in initial industrial structure and concentration for identification, and applies a group IV quantile approach to estimate the effect of import shocks on workers at different parts of the wage distribution. The study finds that the effect of import shocks generated by increased import competition is concentrated on the middle of the wage distribution: while the import shocks negatively and significantly affect workers at the bottom-middle of the wage distribution, its effect on the very bottom and upper parts of the wage groups is insignificant. Moreover, the study finds that this labour market adjustment takes place through a reduction in the hourly wage rather than a decline in total hours worked.

Suggested Citation

  • Anwar S Adem, 2024. "Distributional effect of import shocks on British local labour markets," Oxford Economic Papers, Oxford University Press, vol. 76(2), pages 412-432.
    • Handle: RePEc:oup:oxecpp:v:76:y:2024:i:2:p:412-432.
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    File URL: http://hdl.handle.net/10.1093/oep/gpad008
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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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