Labour market adjustment to third‐party competition: Evidence from Mexico
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China’s exports reduce wages in importing countries, but few studies have looked at competition in third party markets. We examine labor market outcomes in Mexico's apparel and textile sectors associated with U.S. apparel and textile imports from China. Using the Bartik (1991) approach, we find that U.S. imports from China are associated with a reduction of wages and employment in Mexico’s textile and apparel sector. Our results suggest that the adjustment to falling labor demand had larger effects on employment, which is consistent with relatively small firm-level employment adjustment costs, and that low-wage workers are more tied to local markets.
author list (cited authors)
Robertson, R., Halliday, T. J., & Vasireddy, S.