Growing international trade in goods and services has generated economic gains for participating countries. At the same time, the same trade also generates economic costs within these countries in some geographical areas and in some sectors. The study entitled “Identifying Chinese supply shocks: Effects of trade on labor markets”, written by Andreas Fischer (adjunct professor at the LIUC School of Economics and Management) together with co-authors from other European universities, is part of a research line that analyses the economic costs of the strong competition generated by Chinese imports for the United States labour market.
The main objective of this work is to validate the causal relationship between the growth of Chinese imports and the reduction of employment in some local US labour markets that emerged in previous studies. With the use of appropriate econometric techniques, the authors manage to conclude that with China’s entry into the World Trade Organization, the consistent growth in Chinese exports to the United States generated a strong reduction in manufacturing employment in the latter country.