Industry Mix, Local Labor Markets, and the Incidence of Trade Shocks
Steffen Müller, Jens Stegmaier, Moises Yi
Journal of Labor Economics,
No. 3,
2024
Abstract
We analyze how skill transferability and the local industry mix affect the adjustment costs of workers hit by a trade shock. Using German administrative data and novel measures of economic distance we construct an index of labor market absorptiveness that captures the degree to which workers from a particular industry are able to reallocate into other jobs. Among manufacturing workers, we find that the earnings loss associated with increased import exposure is much higher for those who live in the least absorptive regions. We conclude that the local industry composition plays an important role in the adjustment processes of workers.
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Import Shocks and Voting Behavior in Europe Revisited
Annika Backes, Steffen Müller
European Journal of Political Economy,
June
2024
Abstract
We provide first evidence for the long-run causal impact that Chinese imports to European regions had on voting outcomes and revisit earlier estimates of the short-run impact for a methodological reason. The fringes of the political spectrum gained ground many years after the China shock plateaued and, unlike an earlier study by Colantone and Stanig (2018b), we do not find any robust evidence for a short-run effect on far-right votes. Instead, far-left and populist parties gained in the short run. We identify persistent long-run effects of import shocks on voting. These effects are biased towards populism and, to a lesser extent, to the far-right.
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23.04.2024 • 13/2024
Chinese mass imports strengthen extreme parties
Globalisation has led to an increase in votes for the political fringes in Europe. A study by the Halle Institute for Economic Research (IWH) is the first to show the long-term consequences of increased Chinese imports in European regions: Far-right and populist parties in particular have benefited from the so-called China shock in national elections.
Steffen Müller
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Media Response
Media Response March 2025 IWH: Ifo Dresden schließt 2027 in: Frankfurter Allgemeine Zeitung, 28.03.2025 Steffen Müller: Pleitewelle rollt: Es trifft auch viele namhafte…
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Import Shocks and Voting Behavior in Europe Revisited
Annika Backes, Steffen Müller
Abstract
We provide first evidence for the long-run causal impact that Chinese imports to European regions had on voting outcomes and revisit earlier estimates of the short-run impact for a methodological reason. The fringes of the political spectrum gained ground many years after the China shock plateaued and, unlike an earlier study by Colantone and Stanig (2018b), we do not find any robust evidence for a short-run effect on far-right votes. Instead, far-left and populist parties gained in the short run. We identify persistent long-run effects of import shocks on voting. These effects are biased towards populism and, to a lesser extent, to the far-right.
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Archive
Media Response Archive 2021 2020 2019 2018 2017 2016 December 2021 IWH: Ausblick auf Wirtschaftsjahr 2022 in Sachsen mit Bezug auf IWH-Prognose zu Ostdeutschland: "Warum Sachsens…
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Centre for Evidence-based Policy Advice
Centre for Evidence-based Policy Advice (IWH-CEP) The Centre for Evidence-based Policy Advice (IWH-CEP) of the IWH was founded in 2014. It is a platform that bundles and…
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Research Clusters
Three Research Clusters Research Cluster "Economic Dynamics and Stability" Research Questions This cluster focuses on empirical analyses of macroeconomic dynamics and stability.…
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Trade Shocks, Labour Markets and Migration in the First Globalisation
Richard Bräuer, Felix Kersting
Economic Journal,
No. 657,
2024
Abstract
This paper studies the economic and political effects of a large trade shock in agriculture—the grain invasion from the Americas—in Prussia during the first globalisation (1870–913). We show that this shock led to a decline in the employment rate and overall income. However, we do not observe declining per capita income and political polarisation, which we explain by a strong migration response. Our results suggest that the negative and persistent effects of trade shocks we see today are not a universal feature of globalisation, but depend on labour mobility. For our analysis, we digitise data from Prussian industrial and agricultural censuses on the county level and combine them with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian and United States trade data to isolate exogenous variation.
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Financial Technologies and the Effectiveness of Monetary Policy Transmission
Iftekhar Hasan, Boreum Kwak, Xiang Li
European Economic Review,
January
2024
Abstract
This study investigates whether and how financial technologies (FinTech) influence the effectiveness of monetary policy transmission. We use an interacted panel vector autoregression model to explore how the effects of monetary policy shocks change with regional-level FinTech adoption. Results indicate that FinTech adoption generally mitigates the transmission of monetary policy to real GDP, consumer prices, bank loans, and housing prices, with the most significant impact observed in the weakened transmission to bank loan growth. The relaxed financial constraints, regulatory arbitrage, and intensified competition are the possible mechanisms underlying the mitigated transmission.
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