Arbeitspapier

Adjusting to globalization - Evidence from worker-establishment matches in Germany

This paper addresses the impact of rising international trade exposure on individual earnings profiles in heterogeneous worker-establishment matches. We exploit rich panel data on job biographies of manufacturing workers in Germany, and apply a high-dimensional fixed effects approach to analyze endogenous mobility between plants, industries, and regions in response to trade shocks. Rising import penetration reduces earnings within job spells, and it induces workers to leave the exposed industries. Intra-industry mobility to other firms or regions are far less common adjustments. This induced industry mobility mitigates the adverse impacts of import shocks in the workers' subsequent careers, but their cumulated earnings over a longer time horizon are still negatively affected. By contrast, we find much less evidence for sorting into export-oriented industries, but the earnings gains mostly arise within job spells. These results point at an asymmetry in the individual labour market response to trade shocks: Import shocks trigger substantial "push effects", whereas the "pull effects" of export shocks are weaker.

ISBN
978-3-86304-204-2
Language
Englisch

Bibliographic citation
Series: DICE Discussion Paper ; No. 205

Classification
Wirtschaft
Trade and Labor Market Interactions
Wage Level and Structure; Wage Differentials
Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
Subject
international trade
Individual labour market responses
work biographies
endogenous worker mobility
Germany

Event
Geistige Schöpfung
(who)
Dauth, Wolfgang
Findeisen, Sebastian
Suedekum, Jens
Event
Veröffentlichung
(who)
Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
(where)
Düsseldorf
(when)
2016

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Dauth, Wolfgang
  • Findeisen, Sebastian
  • Suedekum, Jens
  • Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Time of origin

  • 2016

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