Oxford Open Economics, 2024, 3, i1042–i1068
https://doi.org/10.1093/ooec/odad046

Dimensions of Inequality: The IFS Deaton Review
Trade and globalization

David Dorn1, * and Peter Levell2
1 Department of Economics, University of Zurich, Schönberggasse1 , CH-8001, Switzerland and Centre for Economic Policy Research
2 Institute for Fiscal Studies, 7 Ridgmount Street, WC1E 7AE, London, UK*Correspondence address. E-mail: david.dorn@econ.uzh.ch

ABSTRACT
Low-income countries’ share of global exports nearly tripled between 1990 and 2015, largely due to China’s emergence as an exporting
powerhouse. Evidence from several European countries and the US shows that import competition from China differentially reduced
employment and earnings for workers in more trade-exposed industries and regions. We show that manufacturing employment
declined most dramatically in countries where import growth was not matched by a commensurate expansion of exports. We also
provide new results for the UK which indicate that imports from China contributed to substantial declines in consumer prices alongside
job losses in manufacturing. However, while the adverse labour market impacts were concentrated on specific groups of workers andregions, consumer benefits from trade were widely dispersed and of similar magnitude for high and low-income households. We
argue that assistance targeted towards displaced workers and depressed areas would better help the losers of globalization than newimport tariffs.
Key words: trade; globalization; inequality; employment; wages; consumer prices; public policy

1. Introduction
Many economies in Western Europe have experienced a sizeable
increase in income inequality since the 1980s, and inequality has
grown even more rapidly in the United States. Whereas educatedworkers in skilled occupations benefited from rising salaries,
wages have stagnated for many less educated workers in unskilledoccupations. The rising inequality in advanced economies coincided with a period of globalization that was characterized by
rapid growth in international merchandise trade.
Basic economic models predict that trade could contributeto greater inequality in skill-abundant advanced economies, as
globalization leads such countries to specialize in skill-intensive
industrial sectors, which raises labour demand for skilled workers
but reduces demand for unskilled ones. Yet despite this theoretical link between trade and inequality, empirical analyses longconcluded that increased trade was not a major cause of increasing inequality in advanced economies. However, this perspectiveon trade and inequality has evolved during the decade of the2010s, as a growing body of empirical research found sizeable
impacts of trade shocks on labour markets and inequality. During
the same period, international trade has become a more contentious subject in political debate, and a many-decades-old trend
towards greater trade liberalization has been broken by new tariffs
that resulted in a ‘trade war’ between the US and China.
We begin this paper by describing the remarkable changes inpatterns of international trade that have taken place over thelast four decades (Section 2), and the contemporaneous conceptual advances in the economic analysis of trade’s impact on thelabour market and inequality (Section 3). We next discuss recent
evidence on the impact of trade on labour markets (Section 4)
and consumer prices (Section 5) in advanced economies. The

following sections discuss broader implications of adverse trade
shocks, including their social and political repercussions (Section
6), as well as options for public policies that seek to support
globalization’s losers (Section 7). We conclude with a discussionof our findings (Section 8).

2. Changing patterns of international trade
We begin by documenting four salient patterns of change ininternational goods trade that have taken place since 1980. These
patterns help in understanding the context and focus of recent
empirical analyses of trade’s impact on labour markets andinequality.
Pattern 1: Rising world trade in goods. The last four decades
have witnessed a large increase in worldwide merchandise trade,
whose value grew from $740 billion in 1980 to $19 trillion in 2018.1
The annual value of goods traded across national boundaries
increased considerably faster than worldwide GDP. Panel a ofFig. 1 shows that the ratio of world exports to world GDP grewfrom 16.3% in 1980 to 22.3% in 2018. However, that increase wasunevenly distributed over the last four decades. The export-toGDP ratio actually declined during both the 1980s and the 2010s,

1World Bank (2021). Figures are in 2019 dollars, and deflated with the US
GDP deflator. Throughout this paper, we focus on trade in goods rather thanservices. Goods trade accounts for about three-quarters of OECD countries’international trade, and it tends to be better measured and more widely studied
than services trade.

Received: May 6, 2023. Revised: May 6, 2023. Accepted: September 9, 2023
© The Author(s) 2024. Published by Oxford University Press.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which
permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.

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Trade and inequality in Europe and the USDorn and Levell

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i1043

and all of the overall expansion occurred in the two intermittent
decades of the 1990s and 2000s. During that period, worldwide
exports rose rapidly from 13.8% of world GDP in 1993 to 25.0%
in 2008.
Pattern 2: Rising share of low-income countries in world exports. The
expansion in trade’s overall volume coincided with remarkablechanges in the composition of trade f lows. One of these changes
was the rising importance of goods exports from low-income
countries. Panel b of Fig. 1 shows that these countries, which
had per-capita annual incomes below $480 in 1987, accounted
for a mere 3–5% of world exports during the 1980s. The lowincome country contribution to world exports slowly increased
during the subsequent decade, from 4.2% in 1990 to 6.7% in
2000. In the following 15 years, low-income countries rapidly rose
to prominence as exporters of goods, and their share of global
exports nearly tripled to 18.4% in 2015, before levelling off in themost recent years.
Pattern 3: Rising share of global value chains in world trade. Anotherimportant change in the composition of world trade comes fromthe rising importance of global value chains (GVCs), where different stages of production take place in different countries. One
measure of this international segmentation of production is theamount of trade that crosses borders multiple times because acountry’s exports embody inputs sourced from abroad. Panel cof Fig. 1 indicates that the fraction of trade associated with GVCs
rose from 41.4% in 1980 to 48.1% in 2015, the last year covered in
the underlying World Bank (2019) data series. As with the global
export-to-GDP ratio, this growth was concentrated in the middle
two decades. The GVC share of world trade grew from 41.6% in
1990 to a peak of 51.8% in 2008, and has declined slightly since.
Pattern 4: Growing trade imbalances. While overall goods tradegrew and changed in composition, some countries increasingly
specialized as manufacturing hubs whose exports exceeded theirgoods imports. These countries therefore experienced a growthin their trade surpluses. Other countries instead expanded theirimports by much more than their exports, and thus realized large
trade deficits. Panel d of Fig. 1 shows the combined value of thegoods trade deficits of all countries whose trade balance in goods
was negative in a given year. Echoing the time pattern of the previous figures, the aggregate trade deficit changed little between
1980 ($685 billion) and 1990 ($717 billion), but then expanded
rapidly, reaching values of $1230 billion in 2000 and $2745 billion
in 2008, before stabilizing at somewhat lower levels.2
The four patterns of rising world trade, a greater share ofworld exports accounted for by low-income countries, a growing
prominence of trade within global value chains, and larger global
trade imbalances all have an obvious common characteristic:
most or all of these changes in patterns of international trade took
place between the early 1990s and the 2008 financial crisis. During
the preceding decade of the 1980s and the subsequent decadeof the 2010s, the volume, composition and balance of trade wereconsiderably more stable.
What sparked the remarkable change in trade patterns during
the 1990s and 2000s? One major contributing factor is the transition of most communist countries towards a market-oriented
economic system during this period, which unleashed an enormous potential for growing participation in international trade. In
Europe, the fall of the Iron Curtain in 1989 spurred a rapid increasein trade between Western European countries and their formerly
communist eastern neighbours. The annual volume of Germany’s
2
While some major deficit countries, notably the US and the UK, operate asurplus in services trade, these are not large enough to offset their substantial
deficits in goods trade. In the US in 2019, the surplus on services trade was only
$285 billion compared with a goods trade deficit of $862 billion. Service exports
are more significant in the UK, but the surplus on services trade (at $132 billion)
still fell short of offsetting the deficit in goods trade (£167 billion) (International
Monetary Fund 2021b).

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Figure 1: Changing patterns of international trade.
Source: Panels a and b are based on data from World Bank (2021). The World Bank defined low-income countries as those that had a per-capita grossnational income (GNI) less than $480 in 1987. Countries that did not exist in 1987 or were not in the data in 1987 were assigned their World Bank
income designation for their first available year. Panel c is fig. 1.2 in World Bank (2019). The GVC share measures the share of world exports that f low
across at least two borders. Panel d is based on data from International Monetary Fund (2021a). It shows the total goods trade deficits of all countries
whose trade balance in goods was negative in a given year. Dollar values are def lated to $2019 with the US GDP def lator.

i1044|Oxford Open Economics, 2024, Vol. 3, No. S1imports from Eastern European countries grew by more than800% over the two decades from 1988 to 2008 (Dauth et al. 2014).3
At a global level, however, the most important transformation
was not the opening of Eastern Europe to international trade, but
the dramatic economic expansion of the world’s most populous
country, China. As Fig. 2 shows, Chinese merchandise exports to
the US and EU15 countries (including the UK) grew from just $4
billion in 1980 to $777 billion in 2019 – an astonishing 194-foldincrease. Chinese worldwide exports reached $2.4 trillion in 2019,making it the world’s largest goods exporter.
China’s rapid expansion had an important impact on all fourof the global trade patterns shown in Fig. 1. During the 1990s
and 2000s, China was the largest contributor to the worldwide
growth in exports-to-GDP, as well as the largest contributor torising trade in global value chains.4 Appendix Fig. A1 in the supplementary information shows that China’s share in worldwide
goods exports grew from a mere 0.9% in 1980 to a high of 13.6%
in 2015. Over the same period, other low-income countries’ sharein world exports rose only modestly from 3.8% in 1980 to 4.8% in
2015, implying that China alone was responsible for more than
90% of low-income countries’ combined export growth over that
period. Of the dramatic doubling of aggregate global goods tradeimbalances between the years 2001 and 2008, one-fifth was dueto the astonishing growth in China’s surplus. Much of this was
accounted for by the growth in bilateral imbalances with the US.
In 2018, the bilateral US–China deficit accounted for 18% of global
goods trade imbalances, while the US goods trade deficit with
China accounted for 48% of the total US trade deficit. The UK’s
deficit with China accounted for 19% of its total deficit in thesame year.
China’s rise followed several decades of poor economic performance during the Maoist era, which kept China well inside its
production frontier and generated abundant potential for latercatch-up growth. Much of that growth was realized during thetwo decades of the 1990s and 2000s, as China transitioned froman economy with strong central planning and little foreign trade
to a market-oriented economy with a sizeable private sector and

3
The integration of Eastern European countries into the European Unionalso led to important migration flows in Europe, which are discussed in Dorn
and Zweimüller (2021).
4
While Germany and the US had leading roles in contributing to the risingfragmentation of GVCs, China’s contribution to the expansion of GVCs cameprimarily from a scale effect where its share in GVC trade grew as its share in
overall trade expanded (World Bank 2019).

5
In 2000, the US granted China the status of Permanent Normal Trade
Relations, after which the tariff rates applied to Chinese goods were no longer
subject to annual re-approval by US Congress. While this policy change did not
directly affect tariff rates, it reduced the threat of a later tariff hike (Pierce andSchott 2016; Handley and Limão 2017). As we show in the last subsection ofSection 4, Chinese exports to the US accelerated notably after 2000, but so did
Chinese exports to the EU. Beyond tariffs, one important sectorial policy change
was the phase-out of the Multifibre Arrangement, through which the EU andthe US had protected their domestic apparel and textile industries from foreigncompetition. The phase-out of that policy by 2005 led to a large spike in importsof Chinese apparel and textiles (e.g. Harrigan and Barrows 2009; Khandelwal
et al. 2013; Utar 2014).

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Figure 2: Volume of Chinese merchandise exports to the US and EU15.
Source: International Monetary Fund (2021a). Dollar values are def lated
to $2019 with the US GDP def lator.

vibrant trade. China’s market opening allowed for a dramatic risein productivity, with output per worker in manufacturing risingat an annual rate of 8% from 1998 to 2007 (Brandt et al. 2012). As
productivity in China surged, manufacturing industries in Europe,
North America and elsewhere were increasingly confronted witha ‘China shock’ of rapidly rising import competition by Chinese
manufacturers (Autor et al. 2016). However, the growth of Chinese
manufacturing exports slowed considerably towards the end of
the 2000s. By this time, China had arguably realized much of thecatch-up growth that was enabled by its earlier economic reforms.
Moreover, the industrial planning of the Chinese government
gave state-owned enterprises an increased prominence again, andChina’s productivity growth slowed down considerably from 2009
onwards (Brandt et al. 2020).
China’s prominent contribution to changing patterns of world
trade during the globalization wave of the 1990s and 2000s
explains why many recent empirical analyses of trade’s impact
on inequality in Europe and the US focus on the ‘China shock’.
However, the one-time event of the former communist bloc’s
integration into the worldwide market economy and international
trade systems also coincided with important declines in trade andcommunication costs, which further contributed to the expansionof world trade.
The rapid improvement of computer technology and in particular the spread of the internet facilitated communication even overlong distances. Malgouyres et al. (2021) show that French firms
expanded their international goods imports by 25% once theirgeographic location got access to broadband internet between
1997 and 2007. Furthermore, the increased use of computer-aided
design and manufacturing facilitated offshoring, as it became easier for firms to transmit exact production specifications to suppliers abroad (Fort 2017). Technological improvements also contributed to a gradual decline in the costs of international air andsea freight shipping during the 1990s and 2000s (Hummels 2007).
The 1990s and 2000s also witnessed a continued decline inglobal tariff rates. The worldwide average tariff for goods shipments declined from 13.6% in 1986 to 7.5% in 2008 (Antràs 2020).
This period covers the establishment of the World Trade Organization (WTO) in 1995, and the creation of new regional free-tradezones such as in South America (Mercosur in 1991), Southeast
Asia (ASEAN Free Trade Area in 1992) and North America (NAFTA
in 1994).
The global decline in tariffs resulted primarily from a reductionof tariff rates applied by developing countries. The average tariff
applied by developed countries, which had already fallen to 6.2%
by 1990, declined only a little further to 3.8% by 2016 (WorldBank 2019). As a consequence, the rapid growth of imports from
China into Europe and the US was arguably not primarily aconsequence of trade policy.5 However, both Western Europe andthe US were involved in the expansion or creation of their own
regional free-trade zones. The European Union (EU) negotiatedassociation agreements with various Eastern European countries

Dorn and Levell

3. Conceptual advances in analysing thelabour market impacts of trade
The classical textbook model in economics that links trade tolabour market inequality is the Heckscher–Ohlin factor proportions model (Heckscher 1919; Ohlin 1933), whose implications forinequality were studied by Stolper and Samuelson (1941). The
Stolper–Samuelson theorem posits that a reduction in the relative
price of low-skill intensive products will lower the real wage ofunskilled workers but raise the real wage of high-skilled workers.
A country in Europe or North America with a relatively welleducated workforce would thus experience rising wage inequality
following trade integration with developing countries, where arelative abundance of unskilled labour allows for cheaper production of low-skill intensive products.
While this theoretical link between trade and inequality had
long been known, empirical research connecting trade to thelabour market gained momentum in the 1990s, when economists
debated the causes of the rapidly rising wage differential between
college-educated and high-school-educated workers in the US
and elsewhere. Empirical studies soon confirmed that international trade did contribute to the rising skill premium in advanced
economies, but also found that the magnitude of trade’s labour
market effect was modest. Krugman et al. (1995) noted that ‘apreponderance of the research to date suggests that the impact ofthird world exports on first world labour markets has been small,or at least elusive’. Indeed, the academic debate about the causesof rising income inequality increasingly rejected trade as a major
inf luence and, according to Wood (2018a), ‘by the year 2000, thedebate was over. Most economists joined a consensus that themain explanation [for rising income inequality] was skill-biased
technological change’.6
There was also reason to expect that the impact of low-income
country imports on inequality in high-income countries may
become even smaller in future years. While Wood (1995) argued
that much of the contemporaneous literature underestimated theextent to which unskilled workers in developed countries had
been hurt by imports from developing countries, he also notedthat ‘I do not expect unskilled workers in developed countries tobe much hurt by even major new entry into the world market for
low-skill-intensive manufactures, simply because these goods are
no longer produced in developed countries. The entry of China
and India, pushing down the world prices of these goods, will benefit developed-country workers, skilled and unskilled alike’. The
increasingly widespread notion that trade has small and perhaps
even declining effects on the labour market reduced scholarly
6
Trade and technology are not entirely separate explanations for risingincome inequality, since both can facilitate each other. For instance, trade
can play a part in incentivizing skill-biased technological change. Acemoglu(2003) found that incorporating endogenous technological change into a modelof international trade doubled estimates of the impact of trade on the skill
premium between 1980 and 1995. However, trade still accounted for only a fifthof the overall growth of the skill premium.

i1045

interest in the topic after the 1990s. The JEL classification code F16
for ‘Trade and Labor Market Interactions’, which was introduced
towards the end of that decade, was present on 19% of the articles
that the American Economic Review published in the field ofinternational trade during the years 1998–2000, but only on 9%of the trade papers published in 2001–10.
One intuitive candidate explanation for the small impact oftrade on wage inequality in early empirical studies is their relianceon data from the 1980s and early 1990s, a period when both overall
trade and exports by low-income countries barely increased (seepanels a and b in Fig. 1 above).7 The view that trade had little
consequence in the labour market took hold precisely at a time
when patterns of trade had started to change rapidly. By the late
2000s, Krugman (2008) warned that ‘the consensus that trade has
only modest effects on inequality rests on relatively old data’.
However, updating earlier calculations with newer data did notchange the conclusions regarding trade’s impact on inequality.
Irwin (2008) notes that a simple factor proportions model proposed by Krugman et al. (1995), which explained 11% of the risein the US skill premium from 1979 to 1992, still only explained
11% of the growing skill premium when Bivens (2007) extended
the underlying data to cover the years 1979 to 2005. Edwards andLawrence’s (2010) analysis of goods prices and wages in the US
concluded that ‘US imports from developing countries mandated
no change in US wage inequality from 1993 to 2006’ and that ‘fears
of rising US wage inequality from developing-country imports
in recent years are unwarranted’. They argued that there waslittle substitutability between the goods produced in the US andthose produced in developing countries, such that greater imports
from low-income countries did not create substantial competitive
pressure for US manufacturers.
The consensus that trade had little impact on inequality was
eventually challenged not primarily by newer data, but by the useof new theoretical and empirical approaches for the investigationof trade’s labour market impacts. Dissatisfaction with several
poor empirical properties of the Heckscher–Ohlin model led tothe development of new theoretical models that linked trade andlabour, including ones that integrated labour market frictions
such as costly job matching, nominal wage rigidity, or costly
mobility of workers across industries and geographic regions (seeHelpman (2018) for a detailed literature review). The assumptionof labour market frictions sharply contrasts with the costlessworker mobility of the Heckscher–Ohlin model, which ensuresthat any wage difference across sectors among workers of thesame education level would immediately be equilibrated throughsectorial mobility. By contrast, models with costly mobility allow
for wage differences across sectors or geographic regions to persist
at least transitionally.8
Guided by the Heckscher–Ohlin model, empirical research on
trade’s labour market impact long measured inequality as thewage difference between workers of different skill levels. The
wage premium of college-educated versus high-school-educatedworkers provided a convenient and easily measurable metric ofinequality. However, according to Wood’s (2018b) (self-)critical
7
Leamer (1996) contended that trade volumes should be of little relevancewhen analysing the Heckscher–Ohlin model since it relates wages to the prices
rather than the quantities of traded goods. However, other authors argued
that trade volumes are relevant for the quantification of counterfactuals in a
Heckscher–Ohlin setting (e.g. Krugman et al. 1995), or they used trade volumes
directly to analyse trade’s impact on the labour market by measuring thelabour content embodied in traded goods (e.g. Wood 1994; Borjas et al. 1997).
8
Trade shocks also have a larger impact on the average wage differential
between skilled and unskilled workers when labour market frictions hinder thereallocation of workers towards sectors with rising labour demand (Bursteinand Vogel 2017).

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during the 1990s, whose provisions included reductions in tariff
rates. These so-called ‘Europe Agreements’ were followed by theadmission of eight Eastern European countries into the EU in
2004. The economic integration between Europe’s east and west
was characterized by rapidly growing Eastern European exports
to the west, and rising Western European investment in the east
(Barysch 2006). In North America, the 1994 NAFTA treaty between
Canada, the US and Mexico facilitated trade between the higherincome countries Canada and the US and their substantiallypoorer southern neighbour Mexico.

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Oxford Open Economics, 2024, Vol. 3, No. S1
2001–10, that contribution more than doubled to 15 of the 78 AER
trade publications during the decade 2011–20.

4. Labour market impacts of trade during
the 1990–2010 globalization
We next discuss recent empirical evidence on the impact of tradeon labour markets in Europe and the US.9 As we emphasized in
Section 2, international trade expanded rapidly during the 1990–
2010 period (panel a in Fig. 1), and included a rising fraction ofexports from low-income countries (panel b in Fig. 1) that was due
largely to the emergence of China as the world-leading exporterof manufactured goods. As a consequence, much recent literature
has focused on the impact of import competition by China (andsometimes other emerging economies) on firms, workers andgeographic regions in developed economies, which we study inthe first two subsections below. The subsequent two subsections
change the perspective from import competition to imports ofintermediate products, and from developed countries’ imports totheir exports.

The impact of import competition on firms andworkers
The enormous expansion of Chinese goods exports during the
1990s and 2000s created rapidly growing import competition for
manufacturing firms in Europe and the US. Between 1991 and2007, more than 90% of the manufacturing industries in countries
such as Germany, Spain and the US faced rising imports from
China.10 However, the extent of that import competition varied
substantially across industries, even within narrower manufacturing sectors such as textiles and apparel (Autor et al. 2016).
Empirical research has used this cross-industry variation to measure the impact of import competition on manufacturing firms in
Europe and the US.
Bloom et al. (2016) show that in a sample of firms from 12
European countries, those who operated in industries with larger
growth of Chinese imports between 1995 and 2017 experienced
falling employment and a greater likelihood of firm exit, withmore adverse effects in less innovative firms. Several studies
from individual European countries confirm that Chinese importcompetition reduced firms’ employment growth and probabilityof survival (e.g. Mion and Zhu (2013) for Belgium, Branstetter etal. (2019) for Portugal and De Lyon and Pessoa (2020) for the UK).
These European results echo early findings from the US, where
exposure to low-income country imports was associated withhigher rates of plant exit during the 1977–97 period (Bernard etal. 2006). From 1991 to 2007, Chinese import competition reduced
sales, employment, capital stocks, and market valuations of publicly traded US firms (Autor et al. 2020b).11
The decline of import-competing firms could in principle affectinequality by shifting the distribution of income between thefirms’ capital owners and their workers. However, evidence on theimpact of trade on inequality through changes in capital incomesis scarce since data on the incomes of capital owners are more
9
For a survey of trade’s impact on inequality in developing countries, see
Pavcnik (2017).
10
Autor et al. (2016) match data on traded goods to a comprehensive set of
397 manufacturing industries that produce these goods. The nine developed
countries covered by their data experienced rising imports from China inanywhere between 343 industries (Switzerland) and 385 industries (US).
11
Research on the impact of Chinese import competition on innovationin Europe initially found positive results (Bloom et al. 2016), but more recent
work shows an inconclusive picture (Campbell and Mau 2019), while innovation
effects in the US appear negative (Autor et al. 2020b). See Shu and Steinwender(2018) for a literature survey.

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assessment of the 1990s literature, ‘people’s visions of reality wereblinkered by HO theory’, which led other margins of inequality
to be overlooked. Based on the explicit or implicit assumptionof frictional labour markets, more recent empirical work instead
investigates how labour markets adjust to trade shocks not only
through wage changes, but also through changes in employment
and unemployment. Moreover, frictional labour markets allow forinequality to emerge not only between the workers of different
education levels, but also between workers of different industries
and between those of different geographic regions. As a consequence, our review of empirical findings in Section 4 does not seek
to explain a single metric of inequality, but instead discusses theimpact of trade on multiple margins of inequality.
To estimate causal impacts of trade shocks on the labour
market, the empirical literature increasingly draws on quasiexperimental identification techniques that are widely used inlabour economics. The assumption of exogenous trade shocks toa country is arguably most plausible when these shocks originate
outside the country – for instance, due to economic reforms
implemented by an important trading partner that improve thepartner’s productivity or lower its trade costs. Autor, Dorn and
Hanson (2013a, 2016) argue that China’s reform-driven economic
expansion presented a major export supply shock to the US andother advanced economies. To isolate the component of Chinese
export growth that most plausibly results from China’s rising
comparative advantage in specific industries, they instrument for
US imports from China with China’s exports to other high-income
countries (thus purging variation in US imports that results from
US-specific demand shocks), or alternatively estimate China’schanging comparative advantage directly from a gravity regression model of trade. Dauth et al. (2014) similarly argue that thefall of the Iron Curtain in Europe and the transition of Eastern
European countries to market-based economies during the 1990s
created a trade shock for countries in Western Europe such as
Germany.
Instead of analysing trade shocks that resulted from a bundleof political and economic reforms in transition economies, otherresearch estimates causal effects of trade shocks based on a single
trade policy reform, including reforms originating in the country
whose labour market outcomes are the object of interest. Wellstudied episodes of trade policy reform include large import tariff
reductions in emerging economies such as Brazil (e.g. Kovak 2013;
Dix-Carneiro and Kovak 2017; Helpman et al. 2017) or India (e.g.
Topalova 2010) during the early 1990s, the reduction of trade
policy uncertainty following the US’s decision to grant Permanent
Normal Trade Relations to China in 2000 (Pierce and Schott 2016;
Handley and Limão 2017), the phase-out of textile import quotas
in the EU and US under the Multifibre Arrangement in the early
2000s, and the US–China ‘tariff war’ in 2018 and 2019 (Flaaen and
Pierce 2020; Autor et al. 2021a). A further approach to identify
causal impacts of trade relies on large and persistent changes
in exchange rates, such as the devaluation of the British pound
following the Brexit referendum (e.g. Breinlich et al. 2019; Costa
et al. 2019) or the appreciation of the Swiss franc following theremoval of its peg to the euro in 2015 (Kaufmann and Renkin 2017;
Auer et al. 2021).
Thanks to new theoretical and empirical approaches to theanalysis of trade’s labour market impacts, and the recognition
that these impacts were larger than previously appreciated,interest in research on trade and labour rebounded during the2010s. While the subject of ‘Trade and Labor Market Interactions’accounted for 6 of the 65 publications on international tradethat the American Economic Review published during the decadeDorn and Levell

12Over a longer period of 1992 to 2012, which spans the Great Recession,
firms in import-competing sectors experienced a greater decline in value added
than in payroll, and the Chinese import shock thus increased the labour income
share.
13
Artuçand McLaren (2015) estimate that in addition to switching costs
across sectors, US workers also face similar costs for moving across occupations, while Traiberman (2020) finds that frictions for occupational switching
dominate in Denmark.

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worker at the 75th percentile of exposure to Chinese importcompetition accumulated 2.9% lower earnings per year between
1992 and 2007 compared with a worker at the 25th percentile
of exposure. Other studies also find adverse impacts of Chinese
import competition on the earnings trajectories of workers inFinland (Nilsson Hakkala and Huttunen 2016), and of imports
from Eastern Europe and China on the earnings of workers inGermany (Dauth et al. 2021).14
These results indicate that trade shocks can create earnings
differentials between workers who have similar skill levels
but are employed in industries with different trade exposure.
However, the reduced-form estimates additionally show that theearnings effects of import competition are considerably more
adverse for workers from lower income strata. Both De Lyon
and Pessoa (2020) and Autor et al. (2014) classify workers into
three income terciles based on their position in the earnings
distribution of workers with the same birth year that was observed
prior to the outcome period.15 In both the UK and the US, theproportional loss in annual earnings as a result of a unit importcompetition shock is more than 60% larger for workers in thebottom earnings tercile than for those in the middle tercile. The
workers who initially belong to the highest-paid tercile of theirbirth cohort suffer the smallest earnings loss.16 These results arealso consistent with findings by Utar (2018), who studied the 2002–
10 adjustment of workers from the Danish textile sector to thephase-out of import quotas under the Multifibre Arrangement.
She finds sharp declines both in cumulative earnings and in
cumulative work hours for employees who possess at most ahigh-school degree, but no significant changes for those withcollege education. Workers whose initial firm lost protection
through import quotas were also more likely to experience
unemployment spells. That unemployment effect was largest
for individuals with manufacturing-specific vocational degrees,
who presumably struggle most to find alternative jobs that fit
their skills.
A remarkable finding of the aforementioned analyses for the
UK and the US is that greater exposure of a worker’s initialindustry to Chinese import competition causes only greater subsequent worker mobility across firms and industries, but not
greater worker mobility across local labour markets. Both De
Lyon and Pessoa (2020) and Autor et al. (2014) find that workers’
exposure to import shocks has a small and insignificant negative
effect on the number of employment years that a worker spends
outside their initial region during the outcome period.17 Theselimited spatial mobility responses suggest that an important partof labour market adjustment to import competition shocks takes
place within geographically defined local labour markets, which
we discuss next.

14
Studying an earlier episode of trade liberalization, Devlin, Kovak andMorrow (2020) find that the 1988 Canada–US Free Trade Agreement had little
impact on the earnings trajectories of workers in Canada.
15
The classification of workers based on within-cohort earnings rank can
be interpreted as a proxy for categorizing workers by education. The underlying
UK data from the Annual Survey of Hours and Earnings and US data fromSocial Security Administration records do not provide direct information on
education.
16
In an analysis for Germany, Dauth et al. (2021) show that exposure toimport competition has the most adverse impact on earnings for workers who
have a low worker fixed effect in a panel wage regression that controls for both
worker and firm fixed effects. A low worker fixed effect can result from a low
education or skill level based on which a worker obtains relatively low earnings
with any employer.
17
In the case of Germany, Dauth et al. (2014) find some evidence for small
positive migration responses of workers whose industries were exposed torising import competition from Eastern Europe and China.

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limited than data for workers’ earnings. Aghion et al. (2021) findthat Chinese import competition reduced labour’s income sharein French manufacturing firms from 2000 to 2007, while Autoret al. (2020c) observe no significant change in capital’s andlabour’s income shares in import-competing US firms from1992 to 2007, as firms’ payrolls contracted by roughly the same
proportion as their value added.12
The contraction of employment in import-competing industries and firms is of course fully consistent with the mechanismsof the Heckscher–Ohlin model. That model would also predictthat the employees of contracting industries are not worse
off than their peers in other sectors. Instead, workers wholose their jobs due to import competition should rapidly andcostlessly move to other industries, such that wages equilibrate
across industries for all workers of the same skill group.
However, structural analyses of workers’ industry choice reject
the notion of costless worker mobility. A European study by
Ashournia (2017) estimates that Danish workers who switch
sectors face a one-time switching cost corresponding to 10–
19% of their annual earnings. This switching cost substantiallyslows the labour market’s adjustment to shocks. If a hypotheticaltrade shock permanently reduced manufacturing prices by
10%, then it would take nearly a decade before 90% of theinduced worker mobility across industries were completed.
Simulation results from Artuçet al. (2010) for the US similarly
suggest that due to switching costs, it would take eight years tocomplete 95% of the sectorial adjustment mandated by a 30%
tariff reduction. Dix-Carneiro (2014) emphasizes that worker
reallocation across industries following trade shocks will be
slowed further if capital is imperfectly mobile. It is difficult to
directly compare estimates of industry-switching costs acrossanalyses from different countries, since such estimates are
sensitive to many modelling assumptions such as unobserved
worker heterogeneity that can partly explain industry choices.
However, a pervasive insight is that there appear to be substantial
industry mobility frictions which prevent workers from costlesslyor rapidly moving across sectors following trade shocks. As
a consequence, the workers of declining import-competing
industries will obtain lower earnings than their peers in othersectors.13
The structural analyses of sectorial moving costs are complemented by reduced-form studies that trace the differential labour
market trajectories of workers in response to the import competition shocks faced by the industries that initially employ them.
Studying longitudinal worker data from the UK, De Lyon andPessoa (2020) find that manufacturing workers were more likely
to move across firms and industries if their initial industry was
exposed to greater growth in Chinese import competition from2000 to 2007. However, despite this increased mobility, workers
from more import-exposed industries accumulated lower earnings. Comparing a manufacturing worker at the 75th percentileof Chinese import exposure with one at the 25th percentile, theformer accumulated 3.1% lower annual earnings during the years
2000–07, conditional on pre-period earnings and other worker andindustry characteristics. These UK estimates are remarkably close
to US results by Autor et al. (2014), who find that a manufacturing|

i1048|Oxford Open Economics, 2024, Vol. 3, No. S1

The impact of import competition on local labour
markets

18
In the European context, researchers have often used the European
Union’s NUTS-3 geographic areas as a measure for local labour markets.
There are 1390 such areas across the EU28 and EFTA countries, which mostly
correspond to administrative regions in the respective countries. Most recent
local labour market analyses in the US have studied outcomes at the level of722 commuting zones, which consist of counties that are connected by strong
commuting ties.

19
Eriksson et al. (2019) additionally show that US local labour markets with
less-educated workforces, as well as those with higher wages and manufacturing industries towards the end of a product cycle, experienced the largest
employment declines as a result of rising Chinese import competition.

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Analyses of trade’s impact on local labour markets have rapidly
achieved popularity in recent years. Local labour markets are
geographic regions that are typically connected to other suchregions by only weak commuting and worker relocation f lows.18
As a consequence, there can be fairly persistent differences acrosslocal labour markets in such outcomes as wage levels or unemployment rates.
Local labour markets are differentially exposed to importcompetition based on the extent to which they are specialized
in import-competing industries. Analyses of labour market
outcomes across regions with differential trade exposure do not
simply provide a geographic aggregate of the impact of industrylevel trade shocks on the employees of exposed industries.
Instead, such analyses also capture all spillover effects of trade
shocks that take place at a local level. Such spillovers can result
from local demand multipliers, from the propagation of industrylevel shocks along local supply chains, or from worker reallocation
across industries within a region. Consistent with such spillover
effects, both the UK analysis by De Lyon and Pessoa (2020)
and the US analysis by Autor et al. (2014) show that individual
workers acquire lower earnings not only when their own industryof employment is exposed to greater import competition from
China, but also when they live in a local labour market where allother workers on average face a large import exposure shock. Even
workers who are not themselves employed in import-competingfirms may be indirectly affected when the contraction of such
firms creates negative local demand spillovers or reduces job
opportunities in their local labour market.
Reduced-form analyses of geographic regions have been used
to study the labour market impacts of Chinese import competition in many developed economies, including the UK (Foliano
and Riley 2017), Germany (Dauth et al. 2014), France (Malgouyres 2017a), Italy (Citino and Linarello 2019), Spain (Donoso
et al. 2015), Norway (Balsvik et al. 2015) and the US (Autor etal. 2013a). These studies produce three common findings. First,
regions with greater exposure to Chinese import competition
experienced a statistically significant differential decline in manufacturing employment in all countries. We discuss the magnitude of these declines across countries in the last subsection ofthis section.
Second, trade-induced declines in manufacturing employment
were not simply offset by greater local employment in other sectors. While the studies from Spain and Norway find that greater
non-manufacturing employment partially compensates for the
manufacturing job losses, the analyses from Germany, France,
Italy and the US observe an additional but often modest local
employment decline outside of manufacturing.
Third, the subset of studies that also analyse changes in local
wage rates all find a negative but often small local wage effect ofimport competition. However, the overall effect of import competition on households’ wage and salary incomes operates not only
through the wages of those who have a job, but also through job
loss. Autor et al. (2013a) calculate that two-thirds of the decline inaverage household earnings in import-competing US local labour

markets is explained by lower employment, while only one-thirdof the income decline is due to lower wage rates for those whostay employed.
A key insight from these analyses is that Chinese import competition shocks had sizeable effects on inequality across local
labour markets, as the adverse consequences of these shocks
were concentrated in the regions where import-exposed industries had clustered. While reduced-form analyses establish thatimport-exposed local labour markets experienced lower income
growth than less exposed locations, they are not immediately
indicative about changes in regions’ absolute level of economic
well-being. In particular, aggregate gains from trade in the formof lower consumer prices (which we study in Section 5) cannot
be identified from a comparison of local labour markets when
price changes are uniform across space. Several recent papers
thus use reduced-form empirical results to calibrate quantitative trade models that estimate the welfare effects of Chinese
imports across local labour markets in the US (Caliendo et al.
2019; Rodríguez-Clare et al. 2019; Adao et al. 2020; Galle et al.
2020). Using different theoretical assumptions on the nature andextent of spatial mobility frictions, most of these papers estimatethat the average welfare gain of US residents due to Chinese
imports was of the order of 0.2–0.3 percentage points. These small
average gains combine with a sizeable variation of gains acrosslocal labour markets, such that some localities experienced an
overall decline in welfare due to the trade shock. For instance,
Galle et al. (2020) estimate that the welfare change was as highas plus 1.64 percentage points in the US local labour market
that gained most from trade with China, but as low as minus
1.42 percentage points in the location that was most negatively
affected. Reduced-form analyses indicate that trade’s impact on
the income dispersion across local labour markets is even substantially larger than suggested by quantitative trade models,
which implies that a substantial minority of the US population
live in regions where the absolute impact of China’s trade on
welfare has been negative (Autor et al. 2021b).
Analyses of average outcomes in local labour markets of course
mask the fact that not every resident of a city is equally affectedby a trade shock. Indeed, local labour market analyses also showthat Chinese import competition increased inequality within local
labour markets, as less-educated, lower-wage workers were more
adversely affected by import shocks than their better-educatedand higher-paid peers. For instance, while import competition
led to similar declines in manufacturing employment amongcollege- and non-college-educated workers in Norway and the US,
in both countries the increase in unemployment was much larger
among the non-college-educated group (Autor et al. 2013a; Balsvik
et al. 2015).19 Moreover, the China shock increased wage inequality
within US commuting zones. Chetverikov et al. (2016) show thatwhile the trade shock reduced wages at all percentiles of the local
labour market wage distribution, the declines were larger at lower
percentiles, with the 20th wage percentile declining twice as muchas the 80th wage percentile.
While most of the recent literature on the local labour market
impacts of trade in Europe and the US focuses on trade with
China, there is also a growing body of evidence on the regional
impacts of trade integration within continents. Dauth et al. (2014)
show that rising imports from Eastern Europe were associatedwith declining manufacturing employment in exposed German

Dorn and Levell

Offshoring and propagation of import shocks
along the supply chain
International trade increasingly occurs within global value chains,
as shown in panel c of Fig. 1 above. The traded goods thus include
not only final products that are sold to consumers, but also intermediate goods that are used as inputs for subsequent production
processes. A subset of the international trade in intermediate
goods is related to offshoring, where a firm imports an input fromabroad that the firm itself could have produced domestically.21
The distinction between final and intermediate goods is challenging empirically because goods often cannot be unambiguously classified into these categories. For instance, imported cartyres are final goods when they are sold to individual car owners,
but they are intermediate goods when sold to car manufacturers. Empirical research has operationalized intermediate goods
either by studying goods imported by manufacturing firms that
presumably use them as inputs, or by using national input–output
tables to assess the extent to which the outputs of one industry
serve as inputs for another industry. Even once an imported
good is identified as an intermediate input, it remains difficult
to determine whether its import constitutes offshoring, wherea firm relocates actual or potential in-house production to aforeign supplier or subsidiary, or whether the firm obtains inputs
from abroad instead of buying them from a domestic supplier.
Early work on offshoring by Feenstra and Hanson (1999) argues
that firms could more likely have produced goods in-house if
those goods are closer to the firms’ own outputs in the productspace. They propose the term ‘narrow offshoring’ for imports ofgoods from the same or similar industries and the term ‘broad
offshoring’ for imports from substantially different industries.
It is instructive to consider how studies of import competition,such as those discussed in the previous two subsections, take
imports of intermediate goods and offshoring into account. These20
A study from Brazil indicates that following a one-time trade liberalization, regional earnings even continued to differentially decline in localities
that experienced a larger surge in import competition (Dix-Carneiro and Kovak
2017).
21
The term ‘offshoring’ is used variably in the literature. We adopt thedefinition proposed in a literature review by Hummels et al. (2018), whocharacterize offshoring as an international import of intermediate goods byfirms that themselves could plausibly have produced these goods.

i1049

analyses construct measures of import exposure that assign all
goods to the industries that produce them. Car imports thus
provide import competition for car manufacturers, while importsof car parts generate competition for domestic parts producers. At
the same time, input–output tables indicate that many industries
obtain substantial amounts of intermediate inputs from otherfirms of the same narrow industry. A firm may import car parts
and, after a few production steps, sell them as car parts again.
Therefore, industry-level studies of import competition actuallyestimate the combined effects of import competition and narrow
offshoring within industries. Moreover, studies of import competition at the level of local labour markets capture not only trade’s
effect on the directly import-competing industries, but also thespillover effects along industry supply chains that operate within
local markets.
By contrast, analyses of manufacturing firms’ imports ofgoods allow the effects of narrow offshoring to be isolated,and often combined with the impacts of broader offshoring,i.e. firms’ imports of goods from different industries. An early
application of this approach is Biscourp and Kramarz’s (2006)
analysis of goods imports by French manufacturing firms during
the period 1986–92. The authors observe that greater imports
were correlated with lower firm-level employment growth.
This negative association was particularly strong for narrow
offshoring, i.e. for goods that a firm could plausibly have produced
itself but whose production it instead chose to offshore. The
relative employment losses related to offshoring were largest forless-skilled production workers. Mion and Zhu (2013) similarly
note that Belgian manufacturing firms’ imports of Chinese
goods between 1996 and 2013 were associated with weakeroverall employment growth and a falling employment shareof production workers in these firms. Hummels et al.’s (2014)
analysis of Danish manufacturing firms over the period 1995–
2006 complements this evidence on offshoring’s employment
effects with results on earnings. Using a shift-share instrumental
variables strategy to isolate a world export supply shock thatinduces greater offshoring, they show that there are substantial
earnings losses for both low-skilled and high-skilled workers who
leave a firm during a year with a large offshoring shock. Amongworkers who remain in the offshoring firms, wages decline for
employees without tertiary education, while the less than 20% of
Danish manufacturing workers who possess a tertiary education
experience a differential increase in wages. The combinationof the effects for leavers and stayers yields a negative overall
wage effect for low-skilled workers. A doubling of a firm’s goods
imports reduces their hourly wage by 3.9% in the year following
the offshoring shock, and the wage remains 1.1% lower even three
years later. For high-skilled workers, a doubling of offshoring
reduces hourly wages by 1.3% in the following year, but raises
them by 1.5% three years after that.
Firms that offshore the production of intermediate inputs may
obtain these inputs either from foreign supplier firms or fromtheir own foreign subsidiaries. Becker et al. (2013a) analysed datafrom German multinational enterprises (MNEs) in order to assess
the correlation between an MNE’s domestic employment composition and the share of its total employment that is in foreign affiliates. Their results show that a greater share of foreign employment within MNEs is correlated with a more highly educatedemployment structure in the MNE’s domestic German operations.
Kovak et al. (2021) use survey data on US MNEs to study the causal
impact of offshoring on domestic employment. They exploit thestaggered introduction of bilateral tax treaties between the US and
18 other countries between 1988 and 2007, which allow US MNEs

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regions, and that German employment reacted more strongly to
growing trade with Eastern Europe than to trade with China.
Hakobyan and McLaren (2016) study effects of the 1993 North
American Free Trade Agreement (NAFTA) on US regions. Theirestimates indicate that greater exposure to import competition
from Mexico reduced wages in more exposed US localities. As
in the analyses for the China import shock, the most adverse
outcomes were found for workers with lower education levels.
Choi et al. (2021) additionally show that the US locations that weremost exposed to rising Mexican import competition experienced
more sluggish employment growth following NAFTA.
The impact of trade shocks on local labour markets can beremarkably persistent. Autor et al. (2021b) analyse outcomes in US
regions nearly one decade after the China import shock plateauedaround 2010. In the year 2018, local labour markets that had been
exposed to greater import competition still suffered from reduced
employment rates and income levels, and there is little evidence
for a recovery from the past trade shock. While these localities
eventually experienced some differential net outmigration, such
migration occurred only with a substantial time lag (Greenland
et al. 2019) and was limited to younger and foreign-born workers(Autor et al. 2021b).20|

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22
There was no significant impact of the pound’s devaluation on the pricesof UK exports.

an insignificant negative effect in non-manufacturing industries.
Studying data from France over the period 2000–07, Aghion
et al. (2021) similarly observe a positive but insignificant effect ofimported inputs from China on employment in manufacturingfirms. While some firms will benefit from access to cheaper
foreign inputs, others may face disruptions when their domestic
suppliers succumb to import competition. Drawing on coarser
data from the World Input–Output Database, Kiyota et al. (2021)
show that supplier exposure to Chinese import competition from2000 to 2014 caused only modest employment changes not only
in US industries, but also in their counterparts in the UK andFrance. Instead, job gains in Germany were significant.23 Adao
et al. (2020) integrate input–output linkages into a local labour
market analysis. They find that US regions whose industries buy
more inputs from supplier industries that are exposed to Chinese
import competition did not experience differential changes in
employment or wages due to this indirect trade exposure.
There are stronger results for shocks that propagate upstream
along the supply chain. Acemoglu et al. (2016) find that both manufacturing and non-manufacturing firms experienced employment declines when their customer industries faced greater
Chinese import competition. These upstream effects are large
in magnitude. The authors estimate that out of a total manufacturing employment loss of 1.4 million jobs that they attributeto the Chinese import shock, about 60% is due to direct importcompetition faced by manufacturing industries, while the remainder stems from import shocks at the level of these industries’
customers or the customers of customers. The job losses outsideof manufacturing in industries such as mining or businessservices which sell their outputs to import-exposed manufacturing are about 85% as high as the employment decline withinmanufacturing.24
In summary, there is some evidence that offshoring can havefavourable wage and even favourable employment effects in thedomestic European and US labour markets, though gains appear
concentrated among high-skilled workers, while low-skilled workers often experience employment and wage declines. At least for
the Chinese import shock, the total domestic employment effectremains negative even when the effects of offshoring and the
propagation of the shock along the supply chain are taken into
account alongside the effect of direct import competition.

Labour market effects of exports
Recent research on trade and labour market inequality hasemphasized the impacts of imports more than those of exports.
While the most basic models of trade assume that the value of acountry’s goods imports matches the value of its exports, there
is no fundamental need for a country’s trade to be balanced.
Indeed, as indicated in panel d of Fig. 1, global trade imbalances
increased rapidly during the 2000s. One contributing factor tothese imbalances was trade between high-income countries andChina, because many countries in Europe and the US experienced

23
Kiyota et al. (2021) estimate that the growth of imports of intermediate
goods from China was 24% of the growth in total imports in the UK, 27% in theUS, 31% in Germany and 36% in France, while more than two-thirds of South
Korea’s imports from China were intermediate rather than final goods.
24
Adao et al. (2020) observe that US local labour markets experienceddifferential declines in employment and wages when not only these regions
themselves, but also their geographic neighbours, faced a large direct exposure
to Chinese import competition. These geographic spillovers may partly reflect
adverse demand spillovers along supply chains, where the contraction ofindustries in neighbouring regions reduces the demand for intermediate inputs
produced by the supplier industries located in a region. However, Autor, Dornand Hanson (2021a) estimate that such geographic spillovers across nearby
local labour markets are small.

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to avoid the double taxation they may otherwise face on goods
shipments between their foreign affiliates and their domestic
operations. The introduction of a tax treaty with a foreign countrycaused MNEs that were already present in that country to expand
their employment there. At the same time, for every 10% increasein the foreign affiliates’ employment, these firms also increased
domestic employment in the US by 1.3%. The authors interpret
this as a positive scale effect, where MNEs increase their operations both abroad and at home in response to the reduced tax burden. However, this expansion of MNEs comes partly at the expenseof domestic firms without international operations, which experience declines in employment and presumably lose market shares
to MNEs. The effect of MNEs’ offshoring on domestic employment
at the industry level remains positive, but is smaller than theemployment gain in the MNEs themselves. That offshoring should
generally have positive employment effects is, however, far fromclear. Boehm et al. (2020) show that US establishments owned by
MNEs experienced lower employment growth from 1993 to 2011
than similar non-MNE establishments, with the MNEs accounting
for 41% of the aggregate loss of US manufacturing jobs overthat period.
While the trend in recent decades has been towards more
offshoring, Costa et al. (2019) instead study a recent episode where
offshoring became less attractive. The 2016 Brexit referendum
in the UK led to a strong and unanticipated depreciation of the
British pound, which increased the costs of imported intermediate
inputs.22 Over the two years following the referendum, workers
in industries that were more exposed to higher input prices
experienced lower wage growth. Consistent with the view that
offshored inputs complement high-skilled workers, wage impacts
were more negative for graduates than for non-graduates.
Analyses of offshoring are interested in imports that occur
upstream from a domestic industry within a supply chain. Whilenarrow offshoring can involve the import of intermediate goods
from other firms of the same industry or from foreign affiliates of MNEs, a more broadly defined offshoring will involve
imports from different supplier industries. A domestic producer oftyres may, for instance, be affected by the availability of cheaper
imports of synthetic rubber and steel fibre, which allows thefirm to offshore its own production of these inputs or to switchfrom domestic suppliers to foreign suppliers of such goods. However, import shocks can propagate along supply chains not only
downstream from supplier industries to their customers, but also
upstream from customers to suppliers. An increased import offoreign cars may, for instance, reduce the ability of domestic tyre
producers to sell their products to domestic car manufacturers.
Acemoglu et al. (2016) investigate both the downstream andupstream propagation of Chinese import shocks across US industries based on national input–output linkages between industries.
For each industry, they measure a direct exposure to Chinese
import competition based on imports of the industry’s own
products, a downstream-propagating exposure based on imports
at the level of an industry’s supplier industries, and an upstreampropagating exposure based on imports by an industry’s customer
industries. Their results indicate that direct exposure to Chinese
import competition caused significant job losses in US manufacturing industries over the 1991–2011 outcome period. Greater
import exposure at the level of supplier industries, which includes
broadly defined offshoring, created a positive but statisticallyinsignificant employment effect in manufacturing industries andDorn and Levell

|

i1051

large increases in imports of Chinese goods without seeing anequivalent growth of goods exports to China.
Germany stands out as a major high-income country that wasable to build up a large trade surplus at a time when othermajor high-income economies incurred sizeable deficits. Dauthet al. (2014) emphasize that Germany’s exposure to trade withcountries from the former communist bloc occurred not primarily
through its relationship with China, but through rapidly growing
trade with nearby countries in Eastern Europe. By 2008, Germany’s
trade volume with the 10 Eastern European countries that had
joined the EU a few years earlier and with the successor countriesof the USSR was about three times larger than its trade with
China. While Germany had a modest trade deficit in its goods
exchange with China, it actually ran a surplus relative to Eastern
Europe. The authors use shift-share shocks similar to those inAutor et al. (2013a) to identify the exposure of German local labour
markets from 1988 to 2008 not only to import competition, butalso to export demand shocks in the industries that are present
in a region. They find that growing exports to Eastern Europe
and China are associated with both rising employment and rising
median wages in local labour markets.
The notion that rising exports are associated with gains forworkers is also supported by firm-level evidence. Biscourp andKramarz (2006) observe that growing exports by French firms to
the rest of the world during the late 1980s and early 1990s werecorrelated with higher employment growth in these firms, especially for skilled production workers. Moreover, greater demand
for the exports of Danish firms during the 1990s and 2000s had
positive wage effects for the employees of these firms (Hummels
et al. 2014). Different from offshoring, which raised skill premiums within firms, exports led to a roughly similar proportional
increase in wages for workers with and without tertiary education.
The local labour market analysis by Dauth et al. (2014) reveals
that the positive employment effects resulting from Germany’s

rising exports are remarkably symmetric to the negative effects ofimport competition. In the case of Germany’s trade with Eastern
Europe, a growth of exports by e1000 per worker over a decaderaises the share of working-age individuals who are employedin manufacturing by 0.90 percentage points, while a growth ofimports by e1000 per worker reduces that share by 0.97 percentage points. Estimates for the effects of Germany’s exposure to
trade with China tend to be smaller and considerably more noisily
estimated. Overall, the results of Dauth et al. suggest that German
local labour markets experienced declines in manufacturing andtotal employment due to import competition from Eastern Europe
and China, but they enjoyed even larger gains in manufacturing
and total employment thanks to rising export demand.

International comparison of the China shock’s
labour market effects
The rapid surge of Chinese goods exports to Europe and the US(as shown in Fig. 2 above) spurred research on trade’s labour
market impacts in many countries. As a consequence, there is
now broad international evidence on the labour market impactsof this ‘China shock’ that allows for a cross-country comparison,subject to some caveats noted below.
We begin this comparison by plotting in Fig. 3 the goods
imports from and exports to China relative to domestic output
for the US and seven of the largest Western European economies.
The left-hand panel of the figure shows that all of these countries
experienced a rapid growth of imports from China. While thevalue of annual imports from China amounted to below 0.3% of
GDP in all countries in 1990, that value grew to between 0.5%
and 1.1% by the year 2000, and to between 0.8% and 2.4% by
2007, prior to the Great Recession. Chinese imports scaled bydomestic GDP were largest in the US throughout this period,
though other countries such as Germany and the UK did notlag by much. While one might expect that the US’s decision

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Figure 3: Change in imports from and exports to China as a share of national GDP in developed economies.
Source: Authors’ calculations using data from International Monetary Fund (2021a) and World Bank (2021).

i1052|Oxford Open Economics, 2024, Vol. 3, No. S1

25
The UK saw a slightly faster increase in Chinese imports relative to GDP
than the US over this period. However, the jump in Chinese imports to the UK
in the late 1990s most likely reflects a change in the treatment of imports from
Hong Kong that originated in China (Baranga 2018).
26
Switzerland is the only country in this comparison that has signed
a free trade agreement with China (in 2013). Swiss exports to China grew
rapidly during the last decade, driven largely by pharmaceuticals and jewellery(Dadush, Domínguez-Jiménez and Bruegel 2020.
27
The cross-industry correlation in import growth across 397 detailed
manufacturing industries between the US and a group of eight other developed
economies (Australia, Denmark, Finland, Germany, Japan, New Zealand, Spainand Switzerland) was 0.92.

these exports subsequently increased more than tenfold relative
to Germany’s GDP through to 2010. In other product categories,
such as chemicals and medical products, Germany, Switzerland,
the UK and the US all had similar exports to China in 1992, but
Germany and Switzerland were more successful at expanding
their exports subsequently.
Trade imbalances have potentially important impacts on
trade’s labour market impacts. Dix-Carneiro et al. (2021) showthat in a multi-sector, multi-country model of trade, imbalanced
trade generates stronger expansions and contractions of different
sectors relative to a benchmark of balanced trade. In particular,a growing deficit in a country’s merchandise trade will be associated with a sharp contraction in its domestic manufacturing
employment, which in the presence of labour market frictions canalso generate elevated unemployment. Evidence from German
local labour markets, discussed in Section 4, indeed indicatesthat manufacturing employment contracted in those regions thatwere exposed to trade with Eastern Europe primarily througha rise in import competition, while regions whose industries
primarily benefited from new export opportunities in the East
experienced employment gains. Following this logic, one may
hypothesize that high-income countries’ rapidly rising tradewith China during the 2000s may have led to larger declines inmanufacturing employment in countries where import growthfrom China strongly exceeded export growth, and more modest
employment changes in countries whose trade with China
remained balanced.
We find evidence consistent with that hypothesis in Fig. 4,
which shows a simple correlation between OECD member
countries’ growth in net goods imports from China per manufacturing worker between 1999 and 2007, and the percentage change
in their country’s manufacturing jobs during the same period.28
The figure shows a statistically significant negative relationshipbetween the growth of a country’s net imports from China and thechange in its manufacturing employment.29 Indeed, three of thefive countries with the largest increase in net Chinese imports per
manufacturing worker are also among the five countries with thelargest contraction in domestic manufacturing employment: theUK, the US and Iceland. Conversely, the only two European countries whose goods exports to China increased by more than theirimports either experienced a modest growth in manufacturingjobs (Switzerland) or saw no change (Luxembourg).
While Fig. 4 shows a significant negative correlation between
net import growth from China and growth of domestic manufacturing employment in developed countries, it is noteworthy
that employment changes can differ substantially across countries with similar China exposure. For instance, the UK, the US,
28
Following Autor et al. (2013a), we scale the dollar change in a country’s
net imports from China by the country’s manufacturing employment at thestart of the period. By focusing on net Chinese import exposure (i.e. imports
minus exports), one implicitly assumes that the association between export
growth and changing manufacturing employment has the opposite sign but
otherwise the same magnitude as the association between imports and manufacturing employment. Dauth et al. (2014) show that imports from and exports
to Eastern Europe indeed had such symmetric employment effects in German
local labour markets.
29
We exclude the Netherlands and Belgium whose trade statistics are
sometimes considered problematic. Both the Netherlands and Belgium have
major port cities that channel a large volume of trade between other European
countries and the rest of the world. The so-called ‘Rotterdam-Antwerp effect’in international trade refers to the fact that some of the goods that justtransitorily pass through these countries are counted both as imports and asexports in these countries’ trade statistics. When the Netherlands and Belgium
import goods from China and re-export them to other European countries,
their own net import exposure to China will be inflated. The inclusion of thesetwo countries in the Fig. 4 analysis would yield a somewhat smaller but still
statistically significant association (coefficient of −0.43 and standard error of0.16).

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to grant Permanent Normal Trade Relations to China in 2000
caused a substantial acceleration of imports into the US due toa reduction in trade policy uncertainty, the aggregate trade data
indicate that import growth similarly accelerated in Europe after
the year 2000. From 2000 to 2007, US imports from China relative
to GDP grew 2.4 times faster than in the previous seven years.
In Germany that number was 2.8, and on average over the seven
European countries in Fig. 3 it was 2.1. Instead, the US differsfrom the European countries mostly by having a larger growthof Chinese imports already during the 1990s.25 Overall, the timeseries patterns for aggregate imports from China are notably morehomogeneous across countries than the patterns for exports to
China, which we discuss next.
The right-hand panel of Fig. 3 plots countries’ annual goods
exports to China as a percentage of GDP. A comparison of the twopanels indicates that export growth lagged well behind import
growth for most countries during the 1990s and 2000s, thus
contributing to the global trade imbalances shown in panel d ofFig. 1 above. For countries such as the US, the UK or Spain, tradewith China grew largely through an expansion of these countries’
imports from China, while exports to China played a minor role.
The notable exceptions to that pattern are Germany, Switzerland
and, to a lesser extent, Sweden. These countries were able torapidly expand their exports to China, and maintained a roughlybalanced trade relationship with regard to China in most years.26
Why were patterns of aggregate import growth more similar
across countries than patterns of export growth? One potential
explanation is that many imports from China are consumer goods
such as apparel, shoes, toys, home electronics or furniture thatare demanded to a similar extent by consumers in the US andin European countries. Autor et al. (2016) notice that the crossindustry correlation in import growth from China in the US andin Germany during 1991–2007 was 0.91, which implies that boththe US and Germany imported very similar goods from China
during that period.27 Instead, China’s own import demand wasconcentrated in specific industries in which only some of thewestern countries possessed an export strength. Appendix Figures
A2 and A3 show a breakdown of exports to China by industry
for the strong exporters Germany and Switzerland, as well as theweaker exporters the UK and the US, in 1992 and 2010. As in Fig. 3,
these export volumes are normalized by the exporting country’s
GDP in order to absorb size differences across countries. A first
noteworthy pattern in the appendix figures is the important roleof machinery in exports to China. Li (2020) emphasizes that
China long lagged behind in its domestic development of modern
production machinery, such that China’s astonishing growth of
manufacturing production was critically reliant on imports offoreign machinery. Germany and Switzerland were already important exporters of machines to China in 1992, and were able tosubstantially increase their machine exports during the following
two decades. By contrast, the US was never an important exporterof machines to China. Germany was also the only country inthis comparison that had large car exports to China in 1992, andDorn and Levell

Figure 5: Effect of a unit increase in Chinese import competition on
local manufacturing employment across countries.
Note: Based on authors’ calculations from studies of Chinese importcompetition from the US (Autor et al. 2013a), Germany (Dauth et al.
2014), Norway (Balsvik et al. 2015), Spain (Donoso et al. 2015) and the UK(Foliano and Riley 2017). Each bar is the coefficient estimate from a
regression of the manufacturing-to-population ratio on the growth ofimport exposure (in thousand US$ 2007 except in Spain where import
exposure is measured in current dollars). Whiskers indicate a 95%
confidence interval based on the coefficient estimate. Specifications arechosen to ensure maximum comparability across studies. See Appendix
B for more details.

Canada and Norway all experienced similar growth of Chinese
net imports, yet manufacturing employment contracted more
dramatically in the UK than in the other three countries.
To investigate the reaction of a country’s labour market to a
trade shock of a given magnitude more systematically, we next
study results from comparable local labour market analyses fromthe UK (Foliano and Riley 2017), Germany (Dauth et al. 2014),
Spain (Donoso et al. 2015), Norway (Balsvik et al. 2015) and the
US (Autor et al. 2013a). A common feature of these studies isthat they estimate the impact of Chinese import competition(measured in thousand dollars of imports per worker) on theshare of a country’s working-age population that is employedin manufacturing. While all of these studies use an empiricali1053

design similar to that of Autor et al. (2013a), the country-specificregression analyses differ in terms of the periods they cover,the geographic concepts of local labour markets they use andthe control variables they incorporate. All of these features canpotentially inf luence estimated effect sizes.30
Having this caveat in mind, we show in Fig. 5 the decline
in the percentage of the working-age population employed in
manufacturing that is associated with a $1000 per worker increasein annual imports from China. The bars in the figure indicate
regression coefficient estimates, while whiskers provide 95% confidence intervals for the regression estimates. The figure showsthat all studies consistently find a statistically significant negative impact of Chinese import competition on the fraction of
the local working-age population that is employed in manufacturing.31 However, the magnitude of these effects varies from a
0.1 percentage point per year decline in Norway and Germany, toa 2.1 percentage point decline per year in Spain.32 Results for the
US and the UK are in between these extremes.
To gauge the economic magnitude of these effects, it is instructive to multiply the Fig. 5 coefficients by the decadal growth ofChinese imports per worker in the corresponding countries. This
simple quantification suggests that relative to a local labour market with zero import exposure, a location facing average importcompetition suffered an additional loss of manufacturing jobs
ranging from 0.2% of the working-age population in Norway, to2.6% of the working-age population in Spain. In the US and the UK,
this scaled manufacturing job loss amounted to 1.0% and 1.1%,
respectively.33 To interpret these numbers, it is important to notethat the manufacturing sector only employs a small minority of
the working-age population in advanced economies. For instance,
the manufacturing-to-population ratio in the US fell from 12.7%
in 1990 to 10.5% in 2000 and 8.5% in 2007. The rise of Chinese
import competition may thus explain a sizeable fraction of theobserved decline in manufacturing employment.
What could explain the sizeable international differences inthe elasticity of manufacturing employment to import competition shocks shown in Fig. 5? We first note that the particularly adverse employment effect of import competition in Spain
appears consistent with the observation that the Spanish labour
market also tends to adjust to adverse cyclical shocks with job
losses that are much larger than in other European countries(Bentolila et al. 2012).
Dauth et al. (2014) further argue that employment effects inGermany may have been smaller than in the US because Germany
invests more in active labour market policies that help displaced
workers to transition to other jobs. Appendix Table A1 provides
OECD measures of spending on active labour market policies

30
Appendix B details the differences across local labour market studies
from different countries.
31
The figure omits studies by Malgouyres (2017a) for France and Citino
and Linarello (2019) for Italy, which use different variable constructions either
for the import shock or for the manufacturing employment outcome. We
show in Appendix B that the negative impact of a unit import shock onlog manufacturing employment is slightly larger in France than in the US,
while import-exposed local labour markets in France additionally experienced
a large decline in non-manufacturing jobs (Appendix Table B4). In Italy, thetrade-induced decline in the manufacturing-to-population ratio as measured
by the product of the average growth of import exposure and the estimatedemployment decline per unit of exposure is twice as large as in Norway andslightly smaller than in Germany (Appendix Table B3).
32
We convert results to be expressed in thousands of 2007 US$, except for
Spain where results are expressed in terms of current dollars (from 1999 to2007) as we could not convert them using the figures reported in Donoso et al.
(2015).
33
See Appendix Table B3 for details of these calculations.

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Figure 4: Percentage change in manufacturing employment andChinese import competition in OECD countries.
Source: Authors’ calculations from OECD STAN database and UN
Comtrade data. Figures are for OECD countries excluding Israel, Latvia,
New Zealand and Turkey (which do not report manufacturing
employment over the relevant time period) and the Netherlands andBelgium (see footnote 29).

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i1054|Oxford Open Economics, 2024, Vol. 3, No. S1

5. Import competition and consumer prices
Research on trade and inequality often emphasizes the differential impacts of trade shocks on the labour market outcomesof different groups of workers. A less analysed channel throughwhich trade can impact inequality is consumer prices. Basic models of international trade posit that trade is welfare-enhancing
because consumers gain access to lower-priced imported goods.
Moreover, consumers may benefit from access to a broader varietyof goods (e.g. Broda and Weinstein 2006), and import competition
can induce domestic producers to reduce their prices (e.g. Feenstra and Weinstein 2017). While the impact of trade on average
consumer prices in a country is interesting in its own right, aprice shift will generate inequality in society only when different
population groups experience differential price changes for theirconsumption bundles.
We provide new evidence on the impact of imports from China
on consumer prices in the UK. We study the evolution of components of the UK’s Consumer Prices Index (CPI), which captures
the change in prices of both imported and domestically produced
goods, and which also seeks to account for changes in productmix and quality that result from the introduction of new productvarieties. To measure the exposure of CPI product categories
to Chinese import competition, we first compute the growth ofChinese import competition at the level of 836 industries, andthen use a crosswalk to map 48 CPI product categories to theindustries that manufacture the corresponding goods.35 For illustrative purposes, we also compute the employment changes in theindustries that map to a given goods category.36 Details of ourcomputations are provided in Appendix C.
Figure 6 plots a simple correlation between the growth in Chinese import penetration and the change in either prices (panela) or employment (panel b) in the UK for the period 1999–2007.
Import penetration grew most for textile and apparel products,
for furniture, and for consumer electronics products and appliances. The product categories with greater import growth generally experienced both larger price and employment declines in
the UK.
The price data include two sets of goods that are notable
outliers. First, the prices of goods related to fuel and heating
34
Worker-level evidence from the UK (De Lyon and Pessoa 2020) and the
US (Autor et al. 2014) indicates that workers who find a job outside their initial
import-exposed industry are more likely to move to another manufacturingindustry rather than the non-traded sector. To the extent that active labour
market policies facilitate a reallocation of workers within the manufacturingsector of a local labour market, one would expect to see smaller coefficientestimates in Fig. 5 for those countries that invest more in such policies.
35
Our analysis excludes CPI categories for services, which are not directly
exposed to goods trade.
36
We map import changes and employment changes to consumer productcodes using a conversion based on the shares of consumption spending devoted
to different industries’ output of different products in 2010. We use the same
mapping to estimate the number of workers employed in the production ofdifferent consumer products (after an adjustment for spending on imported
goods). See Appendix C for more details.

increased much faster than the prices of all other goods from 1999
to 2007, with increases ranging from 34% for vehicle fuel to 89%
for gas and 161% for liquid fuel (these goods are omitted from
Fig. 6 to improve visibility). Other than energy products, the goodwith the largest price increase was tobacco, which shares with
fuel products a high level of product taxes. Since fuel and tobacco
prices often exhibit large changes that are unrelated to international trade, our subsequent analysis probes the robustness of its
results to the exclusion of these goods.37 Second, the largest pricedeclines by far were observed for technology products such as IT
equipment (−82%), photography equipment (−65%) and audiovisual equipment (−61%). While these goods benefit from lowcost assembly in China, their sharp price decline may primarily
be a consequence of rapid technological improvement and theassociated introduction of better product varieties (Houseman
et al. 2014), rather than changing patterns of trade. We thus
also analyse the robustness of our results to excluding thesetechnology goods.
Table 1 provides results of a regression analysis that pools
annualized changes in import competition, prices or employment
for the outcome period 1999–2007 with the corresponding values for the preceding period of 1994–98. All regressions include
a period indicator, and instrument for UK imports from China
with other developed countries’ imports from China. The productcategories are weighted either by their weight in the UK CPI (forprice regressions) or by their employment share in the UK (foremployment regressions) in 1999. We exclude cars and sports
equipment as these two goods categories do not have price data
going back to 1994, leaving us with 46 goods over the two time
periods.
Panel a of Table 1 presents results for price changes. The resultof the first column suggests that for each additional percentage
point of Chinese import penetration in the UK, prices of thecorresponding good fall by 4.9% per year. This effect becomes
smaller when fuel, tobacco and technology products are omitted in columns 2 and 3. One concern with these regressions
is that they may capture secular price changes across productcategories that persist over the full outcome period. We therefore
control in column 4 for product fixed effects, such that the
regression now measures whether products for which the growthof Chinese import competition accelerated in 1999–2007 relative
to 1994–98 also experienced an accelerated price decline. The
augmented regression specification yields a substantially smaller
effect of Chinese import competition on UK prices. In the column
4 model with all products, prices fall by 0.75% per percentage
point increase in import penetration. The column 6 model, whichremoves energy products, tobacco and technology products, yields
a slightly smaller but more precisely estimated coefficient ofminus 0.70%.
Our estimates are readily comparable to a recent analysis of US
CPI data by Jaravel and Sager (2019). Using the same instrumental
variable strategy applied here and controlling for product fixed
effects, they find that US prices fall by 1.44% per additional
percentage point of Chinese import penetration, which is about

37
The rapid economic growth of China and its rising demand for natural
resources likely contributed to rising oil prices during the 1999–2007 period.
However, oil prices subsequently declined considerably even as China’s output
grew further.

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(including benefit administration, employment incentives, training and direct job creation). Of the countries considered in our
Fig. 5 comparison, Norway spent the most on such policies relative
to its unemployment stock in 2007, followed by Germany. The UK
and especially the US spent the least on such policies. While it isdifficult to draw firm conclusions from a comparison of a small
number of countries, the Table A1 data provide some support thatcountries with greater emphasis on active labour market policies
were more successful at containing the job loss due to rising
import competition.34

Dorn and Levell

|

i1055

Table 1: Effect of Chinese import competition on UK consumer prices and employment.

a.  CPI (ppt) Chinese import exposureb.  Employment (ppt) Chinese import exposure
Product fixed effects
Excl. fuel and tobacco
Excl. tech. Goods
N

(1)

(2)

(3)

(4)

(5)

(6)

−4.929∗∗ (0.839)−3.838∗∗ (0.633)−3.173∗∗ (0.537)−0.752 (0.619)−0.643∗ (0.318)−0.702∗ (0.298)−2.880∗∗ (0.632)−2.945∗∗ (0.629)−3.175∗∗ (0.782)−3.270∗∗ (0.770)
X

X

X
X
76

−3.060∗∗ (0.736)
X
X

92

82

−1.796∗∗ (0.418)
X
X
X
76

92

82

Note: Panel a shows the annual average percentage point change in consumer prices for each percentage point increase in Chinese import exposure (results
weighted according to each product’s weight in the overall CPI in 1999). Panel b shows the percentage point change in estimates of the numbers of UK workers
employed making each product for each percentage point increase in Chinese import exposure (weighted by employment in each industry in 1999). Standard
errors in parentheses. Chinese import exposure is measured as the annual average change in the real value of Chinese imports between 1999 and 2007 andbetween 1994 and 1998 relative to UK domestic sales in 1999 (including imports from Hong Kong). Regressions include time period fixed effects. Instruments
are the change in Chinese imports in each industry entering Australia, Canada, Denmark, Finland, France, Germany, Italy, Japan, Spain, Switzerland and the
US (but not including imports from Hong Kong). + p < 0.10, ∗ p < 0.05, ∗∗ p < 0.01.

twice as much as our estimate in column 4 of Table 1.38 Jaravel
and Sager further show that much of the estimated price decline
in the US appears to be due to US manufacturing firms adjusting
their price markups downward in reaction to Chinese importcompetition, rather than the low prices of Chinese import goods
per se.
For illustrative purposes, panel b of Table 1 also studies theimpact of Chinese import penetration on employment changes
in the UK. In the column 1 regression estimates without productfixed effects, we find a 2.9% decline in manufacturing employment per percentage point increase in Chinese import competition.39 Unlike the price estimates in panel a of the table, theestimated employment effect changes little when we control for
product fixed effects, but it falls once we remove technology

38
Jaravel and Sager’s (2019) preferred estimates instrument US imports
from China both with other developed countries’ imports from China and with
Pierce and Schott’s (2016) measure of industries’ exposure to the threat of US
tariff increases that was present prior to the US granting China ‘Permanent
Normal Trade Relations’ in 2000. Using the two instruments simultaneously,
they obtain a price decline of 1.9% per additional percentage point of importpenetration. Earlier work by Auer and Fischer (2010) similarly estimated that a 1
percentage point increase in market penetration by low-wage country imports
reduces US prices by 2.4% per year from 1997 to 2006.
39
Using a specification similar to that of our column 1 model,
Acemoglu et al. (2016) estimate a 1.3 log point decline in employment perpercentage point of Chinese import penetration in a panel of detailed US
manufacturing industries over the period 1991–2011.

products in column 6 to yield a 1.8% employment decline perpercentage point of import penetration.40
To interpret the magnitude of these price and employment
effects, we can perform a simple quantification exercise whichassumes that imports had no impact on prices or employment ingoods categories that had no direct exposure to import competition.41 A reduction in prices of final consumer goods of 0.70–0.75%
for each percentage point increase in Chinese import penetration(Table 1, columns 6 and 4) would translate to a total gain for
consumers of £6.3–6.9 billion, or £375 to £402 per family between
1999 and 2007.42 We can further express these gains in relation
to workers displaced by import competition. The coefficients
40
In Appendix Table C1, we report results on the employment effects
of Chinese import competition using alternative industry classifications (for362 industries defined by either three- or four-digit UK SIC codes and for 60
industries defined by two-digit SIC codes). We find that the more detailed
industry classifications yield smaller employment estimates (employment
declines between 1.6% and 0.8% per percentage point increase in importpenetration once we control for industry fixed effects), while the estimatedimpacts are much larger but less precisely estimated when we use the moreaggregate industry definitions.
 41
We calculate βprice × p ChinaIPp × consp where βprice is the coefficienton Chinese import penetration in the price regressions of Table 1 (taken fromcolumn 4 or 6), ChinaIPp is the change in Chinese import penetration to the UKfrom 1999 to 2007 for product p, and consp is total household final consumption
expenditure on product p in 2001, taken from the ONS Consumer Trends
publication. The figures are expressed in 2001 prices.
42
We use the number of families in 2001 for this calculation. There were17.0 million families in the UK in 2001 (Office for National Statistics 2019).

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Figure 6: Change in Chinese import exposure, Price changes and employment changes, 1999–2007. (Left) Price change and (right) employment change.
Note: Figures exclude services and fuel. Chinese imports include imports from Hong Kong.
Source: Authors’ calculations using data from the CPI, UN Comtrade and the business structure database. Employment data from the Office for
National Statistics (2020).

i1056|

Oxford Open Economics, 2024, Vol. 3, No. S1in columns 6 and 4 of panel b in Table 1 imply that Chinese
import competition led employment in affected industries to fallby 194 000–352 000 workers. This implies benefits to consumers
worth between £19 400 and £32 900 per displaced job.43 Notethat this simple calculation does not incorporate potential pricebenefits to consumers that result when firms lower their prices
because they gain access to cheaper inputs from China. It also
does not include the indirect employment effects along the supply
chain that we discussed in Section 4.
The Table 1 results suggest that Chinese import competition
had a beneficial overall effect on consumer prices in the UK,
but they are not informative about any distributional impacts oftrade-induced price changes. In a cross-country analysis, Fajgelbaum and Khandelwal (2016) show that spending shares on foodand manufactured goods are smaller in higher-income countries. To the degree that this pattern also holds within countries,
one may expect that low-income households benefit more fromdeclining goods prices than more aff luent households.
We use data from the 2001 Living Costs and Food Survey toinvestigate spending patterns across income strata in the UK. The
relationship between income and spending shares on goods is
weakly negative. Households in the lowest income quintile spent
57% of their expenditure on goods, while those in the highest
income quintile spent 52% on goods. However, not all goods
were disproportionately consumed by lower-income households.
Figure 7 plots, for each good in the UK CPI, the share of thisgood in total spending by bottom quintile households, minus thecorresponding spending share for top income quintile households

43ChinaIPp conspβ
We calculate benefits per displaced job as βprice× p ChinaIP emp , where
emp
p
p
p

empp is total employment of workers producing good p in 2001 and βemp is
the coefficient on Chinese import competition in the employment regressions
in Table 1. This follows a similar calculation by Jaravel and Sager (2019), who
obtain a much larger benefit for consumers of $288 000 per displaced worker
in the US when they use a comparable specification and instruments. In their
US estimates, the effect of the import shock is larger for prices and smaller forβ

employment than in the UK, such that the ratio βpriceis two to four times larger
emp
in the US. Moreover, Jaravel and Sager scale the percentage change in consumer
prices not with household consumption, but with domestic absorption which
also includes the purchases by firms and government of goods whose prices
may not be accurately captured in the CPI.

44
The distinction between spending on domestically produced goods andspending on imported goods will be less relevant if import competition induces
domestic producers to substantially reduce their prices, as suggested by Jaravel
and Sager (2019).
45
While the rich and poor have roughly equal spending shares for importexposed products, it could be that for some reason, the goods that are more
often purchased by one group may have prices that react more elastically toan import shock of a given magnitude. Jaravel and Sager (2019) conduct a
split-sample analysis, in which prices of goods consumed more by the poor
have stronger reactions to the trade shock. When we estimate price changes
in the UK separately for the half of goods that are relatively more or less often
consumed by the poor, then we find mixed results across different regression
specifications. Coefficient estimates for the impact of import competition are
more negative for the prices of goods consumed more by the rich when using
the regression models in columns 1 and 2 of Table 1, while the converse holds
for the models in columns 3, 4, 5 and 6.

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Figure 7: Difference in spending by poor and rich in 2001 against thechange in Chinese import exposure between 1999 and 2007.
Note: Figure excludes services. Chinese imports include imports from
Hong Kong.
Source: Authors’ calculations using data from the CPI, UN Comtrade
and the business structure database. Employment data from the Officefor National Statistics (2020).

in 2001, and shows this against the growth in Chinese importpenetration from 1999 to 2007. Most of the goods on which the
low-income households spend a larger fraction of their expenditure compared with high-income households are food products
such as meat, bread and dairy, which face no meaningful importcompetition from China. The high-income households insteadoutspend the poor on cars and motor fuels, which again have little
Chinese trade exposure. Among the goods that face a significant
growth in import competition, the poor spend relatively more on
shoes and appliances, but the rich spend relatively more on a
sizeable number of import-exposed products such as computers,
furniture and garments. As a consequence, the regression slope in
Fig. 7 is weakly negative, and further calculation reveals that the
average import exposure of the top income quintile’s goods basket
is about 16% larger than the exposure of the bottom quintile’s
basket. While low-income households thus spend a larger fractionof their overall expenditure on goods, the high-income households
spend relatively more on the import-competing goods that standto benefit most from price declines. These two offsetting effects
are nearly equally large in magnitude, such that the import
exposure of the entire expenditure basket of goods and services
is almost equivalent for both groups. Therefore, our analysis
suggests that trade-induced price declines equally benefit lowincome and high-income households, and thus have little impact
on inequality between these groups.
One caveat of this simple analysis of trade’s distributional
impacts is that Fig. 7 captures the rich and the poor’s expenditure
shares on goods regardless of whether these goods have been
domestically produced or imported. If the low-income households
were more likely to consume cheap imported products while
aff luent households more often buy domestic products whose
prices change little, then our analysis may underestimate therelative benefit to the poor in terms of lower prices.44 However,Levell et al. (2017) show for the case of food products that UK
households of different income levels do not systematically differ
in their relative purchases of domestic versus imported goods.
Borusyak and Jaravel (2018) provide broader evidence for the US,
where the college-educated and those with lower educational
attainment spend similar fractions of their overall expenditureon imported goods. This observation also holds when indirectspending on imports is taken into account, which occurs when
consumers purchase domestic goods that have been produced
using imported intermediate inputs. Three separate analyses by
Borusyak and Jaravel (2018), Hottman and Monarch (2018) andBai and Stumpner (2019) all find that rising Chinese imports to
the US reduced consumer prices roughly evenly for households ofdifferent education groups or income strata.45
In addition to the literature on the price effects of Chinese
import competition, recent empirical research has also analysed
the response of domestic prices in Europe and the US to sudden

Dorn and Levell

6. Societal and political repercussions
Fissures in the fabric of society
Economic analysis usually evaluates the welfare effects of trade
based on its impact on people’s consumption possibilities. These
are determined both by their labour earnings and by the price andvariety of the goods that they can purchase. From this perspective,a loss of well-paid manufacturing jobs would be problematic
primarily to the extent that it reduces workers’ earnings.47
However, the notion that a job simply serves as a source ofincome is incomplete. The broader societal implications of job
loss are vividly portrayed in Vance’s (2016) best-selling memoirthat recounts the rise and decline of a manufacturing town in
the US Midwest. When the local steel plant downsized during the
1980s, many workers lost not only their jobs but also some of
their pride and purpose. Public facilities in the city deteriorated,
substance abuse and crime increased, and families broke apart.
Vance cites the work of sociologist William Julius Wilson (1996),
who observed that ‘A neighborhood in which people are poor
but employed is different from a neighborhood in which people
46
See, for example, Breinlich et al. (2019) on the depreciation of the
British pound following the Brexit referendum, Auer et al. (2021) on the 2015
appreciation of the Swiss franc following the end of its peg to the euro, andAmiti et al. (2019) and Fajgelbaum et al. (2020) on the import tariffs introducedby the US in 2018.
47
In theoretical models that include a basic labour–leisure trade-off, job
loss and unemployment would have a negative effect on workers’ utility due
to the reduction of income, but greater leisure time of workers who are out ofjobs would contribute positively to utility.

i1057

are poor and jobless. Many of today’s problems in the innercity ghetto neighborhoods—crime, family dissolution, welfare, lowlevels of social organization, and so on—are fundamentally aconsequence of the disappearance of work’. Vance argues thatthese observations, which originally referred to inner-city ghettos,
apply equally to decaying manufacturing towns.
Recent research brings more systematic support to the notionthat localized impacts of import competition shocks had broadersocial repercussions beyond changes in individual earnings. Felerand Senses (2017) show that US local labour markets with greater
exposure to Chinese competition experienced declines in local tax
revenues which in turn led to declines in government expenditures for such purposes as education, parks and natural resources,
and transportation. Moreover, they and Che et al. (2018) bothreport increased crime rates in these localities, especially regarding property crime.
Import competition shocks have also been linked to a rangeof adverse health behaviours and outcomes. Drawing on datafrom the British Household Panel Survey, Colantone et al. (2019)show that workers in the UK whose industries become exposed
to greater Chinese import competition experience higher rates ofanxiety and depression, social dysfunction and loss of confidence.
These individuals also become more likely to report alcohol anddrug consumption and heavy smoking. The magnitude of the estimated health impacts is large. Under the assumption that Chinese
import competition had no impact on the health of individuals
who work in industries with zero trade exposure, the authors
estimate that the trade-induced deterioration in mental healthreduced life quality of workers in the UK by a monetary equivalentof 0.35% of GDP in the year 2007.48 In analyses of local labour
markets in the US, Lang et al. (2018) similarly detect that greater
exposure to Chinese import competition increased mental healthproblems in the local population. Moreover, a greater fraction ofindividuals in these localities report an inability to afford a doctor
visit. In regions that simultaneously faced a large exposure toautomation, the import shocks also contributed to a broad rangeof additional adverse health outcomes, such as diabetes, obesityand pain (Adda and Fawaz 2020).49 Perhaps most worrisome,local import exposure induced higher mortality rates, notably
due to drug and alcohol poisoning (Autor et al. 2019; Pierce andSchott 2020).
Trade shocks can also affect family and household structures,with shocks to female and male workers generating substantiallydifferent results. Keller and Utar (2018) show that Danish workers
whose initial employers faced rising import competition from
China during the period 2000–09 spent less time as employees
at the initial firm than otherwise-comparable workers whose
industries were not exposed to import competition. While thetrade-induced decline of employment at the initial firm had asimilar magnitude for both women and men, the subsequent
career trajectories differed substantially across genders. Men’s
reduced employment at the initial firm was compensated by48
Colantone et al. (2019) estimate how import exposure impacts a qualityof-life metric that is used for the computation of quality-adjusted life years.
A worker in an industry with average growth of Chinese import competition
experiences a reduction in quality of life by 0.6%. When a quality-adjusted life
year is valued at £30 000, the average worker’s reduction in quality of life due
to deteriorated mental health has a monetary cost equivalent of £178, and thetotal cost summed over all workers equates to 0.35% of GDP.
49
Adda and Fawaz (2020) follow Autor and Dorn (2013) in measuringlocal labour markets’ exposure to automation based on their specializationin routine-task-intensive occupations, which can potentially be substituted bycomputers and robots. Autor et al. (2013b) show that the routine-intensity of
US commuting zones is not correlated with their exposure to Chinese importcompetition, which allows separate identification of the impacts of automationand trade on local labour markets (Autor et al. 2015).

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large changes in exchange rates or changes in tariffs.46 Given
the above observation that the expenditure shares on goods orimported goods do not vary greatly across income groups within
the UK or the US, one might expect that changes in goods prices do
not create substantial inf lation inequality, unless a price change– for instance due to tariffs – differentially affects goods whose
expenditure shares vary strongly across income groups. Breinlich
et al. (2019) indeed estimate that the sudden depreciation of the
British pound following the 2016 Brexit vote increased prices for
consumers in the UK by an average of 2.9%, but had no differential
impact on households of different income levels.
While Section 4 emphasized the differential impact of trade
shocks on labour market outcomes across regions, there ismuch less evidence on their regional price effects. It is generally
assumed that the prices of traded goods do not vary greatly
across space within a country. However, the price effects of animport shock could still vary across regions if there is variationin regional consumption bundles. Breinlich et al. (2019) provide
some evidence for such spatial effects in their analysis of changes
in UK consumer prices following the sterling depreciation of
2016. They estimate that the resulting increase in inf lation was
0.7 percentage points lower in the London area, where housing
costs account for a relatively large share of overall expenditure,than in Northern Ireland, where consumers spend a relatively
high proportion of their income on such goods as food, clothing
and fuel. In the case of the Chinese import competition shockin the US, Bai and Stumpner (2019) instead find no evidence fordifferential price effects across major regions of the country.
In sum, we conclude that the impact of trade shocks on prices
appears to be quite uniform across income groups and geographic
regions. While shocks such as rising import competition contributed to greater inequality in labour market outcomes, suchinequality does not appear to be substantially offset or exacerbated by differential changes in prices.

|

i1058|Oxford Open Economics, 2024, Vol. 3, No. S1

Public attitudes towards trade and electoral
outcomes
One might expect the negative consequences of increased importcompetition for certain groups and regions to be ref lected inpublic attitudes towards trade, electoral outcomes and ultimately
countries’ willingness to pursue open trade policies.
Davenport et al. (2020) analyse recent international data fromthe PEW Global Attitudes Survey, which asked respondents about
their general attitudes towards trade. Figure 8 shows the shareof respondents in five large high-income countries who statedthat international trade was either ‘good’ or ‘very good’ for theircountry in successive surveys from 2002 to 2018. Public attitudes
towards trade indeed deteriorated in the 2000s when globalization
and Chinese import competition were accelerating most rapidly.
Averaged over the five indicated countries, the share of survey
respondents with favourable attitudes towards trade fell from
85% in 2002 to 74% in 2007. In the US, the share of positive
views on trade even declined by a remarkable 18 percentage
points over this five-year period. However, the deterioration in
attitudes towards trade during the 2000s was not permanent. As

50
The notion that an adverse local labour market shock may lead not
only to economic but also to social decline does not apply to recent trade
shocks only. For instance, Black et al. (2003) document that the rapid declineof the US coal and steel industries during the 1980s caused an increase insingle-parent households, as employment opportunities for men deteriorated
in heavily affected areas.

Figure 8: Change in positive attitudes towards trade.
Note: Calculations by Davenport et al. (2020) based on pew global
attitudes surveys conducted in summer 2002 and spring 2007, 2010,2011, 2014 and 2018. Italy was not included in the surveys for spring2010 and 2011. The vertical axis shows the percentage of respondents
agreeing that trade with other countries is ‘very good’ or ‘somewhat
good’. Shares exclude those who refused to answer.

seen in Fig. 1, growth in international goods trade levelled off
after 2007, and Fig. 8 indicates that favourable attitudes towards
trade rebounded during that period. By 2018, the earlier declines
in positive attitudes towards trade had largely reversed in all
indicated countries except Italy.51
While the survey evidence indicates that a majority of thegeneral public have favourable views on trade, additional resultsin Davenport et al. (2020) show that those without a college education are more likely to hold sceptical attitudes towards trade inall surveyed OECD countries. Moreover, public views on trade are
more ambivalent than those of academic economists, who tend
to be almost unequivocal in their support of open trade policies
even if they acknowledge that trade may make some workers
worse off.52
Davenport et al. (2020) also note that despite the generally
favourable attitudes towards trade, survey respondents hold more
mixed views on trade’s impact on jobs, wages and prices. In
particular, in all surveyed OECD countries other than Israel andSweden (where attitudes were more favourable), only 20–40% ofsurvey respondents stated that trade reduces prices. This result
stands in stark contrast to empirical analyses such as in Section 5,

51
The rebound in positive attitudes towards trade is confirmed by othersources. For example, surveys by Gallup have regularly asked Americans
whether they viewed trade as ‘an opportunity for economic growth throughincreased U.S. exports’ or ‘a threat to the economy from foreign imports’. In
2008, 41% of adults saw trade as an opportunity for growth and 52% thought
it was a threat to the economy. By contrast in 2019, 74% regarded it as anopportunity and just 21% viewed it as a threat (Saad 2019). In the UK, a 2019
survey by the Department for International Trade indicates that two-thirdsof respondents reported a positive attitude towards free trade agreements(Department for International Trade 2020).
52
The University of Chicago’s Initiative on Global Markets (IGM) has
repeatedly surveyed its panels of leading economics professors on trade issues.
In 2012, 35 of 37 US economists agreed that US citizens are on average betteroff thanks to the North American Free Trade Agreement (NAFTA), and 34 of
34 said that trade with China makes most Americans better off. In 2016, 46 of
47 European economists agreed that the average Western European citizen isbetter off thanks to trade within the EU; and in 2018, 38 of 39 said that tradewith China makes most Europeans better off. Most of the survey respondents(33 of 34 in the US and 33 of 39 in Europe) also agree that trade has madesome American and European workers worse off who work in sectors, suchas clothing or furniture production, that face heavy competition from Chinese
imports. In all cases, the economists who did not agree with the statements
were either uncertain or had no opinion, while no one disagreed. See http://
www.igmchicago.org/.

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correspondingly longer employment spells at other firms, but
women’s reduced employment at the initial firm was associated with longer periods of non-employment. Women instead
became more likely to marry and to have children, and theimport shock thus raised fertility and marriage rates overall.
These Danish results partly echo findings for the US. Autor et al.
(2019) split the aggregate import exposure of local labour markets
into gender-specific shocks based on the initial gender composition of trade-exposed local industries, and find that an adverse
shock to females’ labour market opportunities increases marriage rates and fertility. However, shocks that reduce employment
and earnings primarily among men have the opposite effects
of reducing marriage and childbirth. Since the US manufacturing sector employs substantially more men than women, theadverse effects for men dominate in the aggregate, which meansthat local labour markets with greater overall import exposure
experience larger employment and earnings declines among men
than among women, and reductions in fertility, marriage andcohabitation. Moreover, children in these localities become more
likely to grow up in poor and single-parent-headed households.50
Complementing this evidence, the UK study by Colantone et al.
(2019) finds evidence that children experience adverse outcomes
as a consequence of import shocks in their father’s industry,
while there are no effects of shocks to their mother’s industry.
In particular, children aged 11–15 whose father’s industry faced
greater trade shocks were less likely to speak to parents about
issues the youngsters cared about, spent longer hours watchingTV, had lower self-esteem, and felt greater unhappiness with life.
It is noteworthy that the adverse impacts of trade shocks
on public goods provision, crime, health and family structures
affect the residents of the same locations, and probably often thesame individuals, who also suffer the most negative economic
consequences from these shocks. Traditional economic analyses
that study the effect of trade on inequality through the lens ofincome and consumption only may thus severely underestimate
the full extent of trade’s impact on inequality in society.

Dorn and Levell

53
See Walter (2021) for a review of the political science literature on theperceived backlash against trade and other forms of globalization.
54
See Rodrik (2020) for a discussion of additional factors beyond trade that
contributed to the rise of right-wing populism.

i1059

parties, and not left-wing parties that promote greater financial
redistribution.
One interpretation is that nationalist right-wing politicians
promote protectionist trade policies that shield domestic workers
from the effects of import competition. The 2016 election of
Donald Trump as president of the US stands out because hespoke far more about trade during campaign events and took
more protectionist stances than any other major-party candidate
for the US presidency from 2008 to 2016 (Cerrato et al. 2018).
Supporters of Trump were disproportionately likely to state that
trade had hurt their families, both compared with supporters ofother Republican politicians and compared with the supportersof Democrats who ran in the 2016 presidential primaries (Pew
Research Center 2016).55 Once elected, Trump followed up on
his campaign promise to introduce new import tariffs, especiallyon goods from China.56 In Europe, many far-right parties sharea scepticism about the European Union and demand greater
national sovereignty, but trade protectionism is not necessarily asalient issue.57
Another interpretation is that the lasting economic decline of
local labour markets due to import competition contributed to acultural backlash of rising nationalism and support for right-wingparties’ anti-immigration stances. This more general backlash
may have then persisted even as general attitudes towards trade
recovered. Colantone and Stanig (2018b) provide evidence for aconnection between trade shocks and anti-immigrant sentimentbased on survey data from the 2016 British Election Study. Theyshow that the residents of import-competing regions of the UK
were less likely to perceive immigration as good for Britain’s
economy or cultural life, and were less likely to advocate greater
immigration. Cerrato et al. (2018) document in pooled US survey
data for the years 2008 to 2016 that the residents of local labour
markets facing greater import competition have more negative
attitudes towards Muslims, Hispanics and Asians, and are more
likely to state that immigrants take away jobs from natives. Economic theory provides several explanations for such an impact ofadverse economic shocks on nationalism and anti-immigration
sentiment. Grossman and Helpman (2018) argue that economic
decline can increase people’s identification with their own socialgroup, while Gennaioli and Tabellini (2019) note that shocks canshift group allegiance from economic classes (high- and lowincome) to culture-based identity that pitches nationalists against
cosmopolitans and immigrants.
Politicians may also strategically emphasize controversial
issues in order to strengthen cultural identification and increase
turnout among their supporters (Glaeser et al. 2005). Indeed, thewidely perceived backlash against globalization, as ref lected inmany recent political outcomes, may be less a consequence of a55
Survey data collected by Di Tella and Rodrik (2020) show that support
for trade protection rises especially strongly when respondents are confronted
with a scenario of job loss due to outsourcing to a developing country, but also
to a lower extent when job loss is due to other labour market shocks such astechnological change.
56
Trade policy has not always been a strongly partisan topic in the US. In
2009, a survey by the Pew Research Center found that the fraction of registeredvoters who stated that trade agreements between the US and other countries
were bad for the US was about one-third both among self-identified supportersof the Republican party and of the Democratic party (Jones 2018). By 2018, thefraction of respondents who thought trade agreements were bad had increased
to 46% among Republicans, and declined to 19% among Democrats. Feigenbaum and Hall (2015) note that both Republican and Democratic politicians
who represent US congressional districts with high exposure to Chinese importcompetition have become more likely to vote against trade liberalization.
57
Survey data indicate that voters who supported the UK’s 2016 Brexit
referendum saw Britain’s exit from the European Union as an opportunity
to achieve greater sovereignty and reduced immigration, but also to achieve
greater trade openness through new trade agreements (Owen and Walter 2017).

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which find sizeable benefits from trade in the form of lower
prices. It is plausible that many people either do not notice tradeinduced price declines, or fail to identify increased trade as acause of observed price reductions. The fraction of respondents
perceiving a positive impact of trade on jobs is larger and ranges
from about 30% to 60% in most countries, while fewer survey
responses perceive a positive effect on wages.
Research in both economics and political science has exploredwhether import competition shocks in the 2000s also affected
electoral outcomes specifically in those local labour markets
that were most exposed to trade.53 Colantone and Stanig (2018a)
relate the Chinese import competition faced by large geographic
regions in 15 Western European countries to outcomes in parliamentary elections. They find that rising import competition
was associated with electoral gains for far-right parties between
1988 and 2007, while Milner (2021) shows that these effects persist through 2018. This aggregate result receives support from
more detailed local labour market studies in individual countries, which showed an impact of import competition on growing
electoral success of far-right fringe parties in Germany parliamentary elections between 1987 and 2009 (Dippel et al. 2021)
and of France’s National Front party in presidential elections
from 1995 to 2012 (Malgouyres 2017b). Moreover, residents of UK
regions that faced a larger growth of import competition during
the 1990s and 2000s became more likely to voice nationalist
sentiments and lower support for EU membership in the British
Household Panel Survey (Harms and Steiner 2018), and theseregions were more likely to vote for Brexit in 2016 (Colantone andStanig 2018b).
For the US, Autor et al. (2020a) observe various outcomesthat suggest an ideological and electoral shift to the right inlocal labour markets with greater exposure to Chinese importcompetition over the period 2000–16. These outcomes include
a rising market share of the pro-Republican TV channel Fox
News, a greater growth of campaign contributions by conservative donors, a larger probability of electing politicians from theright wing of the Republican party in congressional elections,and greater vote shares for the candidates of the Republican
party in presidential elections. These outcomes, however, do not
ref lect a monotone shift towards more conservativism. Importexposed locations also saw increased campaign contributions
by left-wing donors, and candidates from the left wing of the
Democratic party became more likely to win election to Congressin regions where non-Hispanic whites account for a minorityof the population. Instead, electoral losses largely concentrated
among moderate members of the Democratic party, thus contributing to political polarization. The trade-induced shifts inelectoral outcomes were largely complete by the year 2010 when
Chinese import growth started to slow down and public attitudes
toward trade were improving, but the electoral gains persisted insubsequent years.
It is not immediately obvious why import competition would
lead to electoral gains for populist right-wing parties and politicians.54 Using a mediation analysis, Dippel et al. (2022) show thatthe effect of the import shock on vote shares for far-right parties
in Germany can be fully explained by the shock’s adverse impact
on local labour market outcomes. However, this leaves open thequestion of why a deterioration in local labour market conditions due to trade would favour primarily nationalist right-wing|

i1060|Oxford Open Economics, 2024, Vol. 3, No. S1swing in public opinion against globalization than a result of its
politicization (Walter 2021).

7. Policies to support globalization’s losers

Compensating income losses
Economists have long realized that trade could be financiallybeneficial for everyone.58 For this to be the case, however, it isnecessary that the beneficiaries from trade use a part of theirgains to provide compensation to trade’s losers. In practice, such
redistribution occurs primarily through general tax and transfer
systems that shift resources from employed and high-income
individuals towards unemployed and low-income individuals.
Evidence on government transfers triggered by trade shocks
is scarce. Autor et al. (2013a) show that US households in local
labour markets with greater exposure to Chinese import competition report larger receipt of social security and welfare benefits.
Comparing local labour markets at the 75th and 25th percentilesof import exposure over the 2000–07 period, the social security
and welfare payments per working-age adult increased by 2.2%
more in the former location. This elasticity is very similar to thatof wage and salary incomes, which declined by a differential 2.3%.
However, when measured in dollar rather than percentage terms,
the estimated increase in social security and welfare income
amounts to just an additional $18 per adult and year, which falls
far short of an estimated $581 decline in wage and salary income.
In addition to analysing households’ self-reported social security and welfare income, Autor et al. (2013a) studied government
data that cover a broader measure of transfer expenditures, which
additionally includes unemployment benefits, medical benefits
and educational assistance. Some of these transfers, such as thequantitatively important medical assistance, comprise in-kindbenefits rather than financial payments to households. All of theaforementioned types of transfers differentially increased in more
import-exposed locations. Again comparing local labour markets
at the 75th and 25th percentiles of import exposure over the 2000–
07 period, the former experienced an additional $63 per-capita
growth in annual transfer payments, with one-third of that effectcoming from medical benefits alone. However, this increase ingovernment transfers still only compensates for a modest portionof the trade-induced earnings decline.59
The situation is different in countries with more extensive
welfare systems. Utar (2018) finds that Danish workers in firms
directly threatened by the expiration of the Multifibre Agreement

58

This notion is often considered to be a fundamental tenet of economics.
For instance, the widely used introductory economics textbook by Mankiw(2011) states as its fifth principle of economics: ‘Trade can make everyone
better off’.
59
Barrot et al. (2017) show that households in more import-competing local
labour markets instead accumulate greater debt in the form of home equity
extraction and credit card debt.

Lowering adjustment costs
Adverse labour market impacts of trade shocks such as rising
import competition from China are differentially concentrated
among the employees of the industries most exposed to suchshocks and in the geographic regions where such industries areconcentrated. Many workers do not quickly adjust to trade shocks
through mobility across sectors and space.
Active labour market policies (ALMPs) seek to reduce adjustment costs in the labour market by facilitating workers’ reemployment through such measures as job search counselling,
retraining, or employment subsidies.60 Recognizing trade’s
potential to disrupt labour markets, the US set up a trade-specific
ALMP called Trade Adjustment Assistance (TAA) in 1962. President
Kennedy explained that ‘When considerations of national policy
make it desirable to avoid higher tariffs, those injured by thatcompetition should not be required to bear the full brunt of the
impact. Rather, the burden of economic adjustment should beborne in part by the Federal Government’ (Kennedy 1962).61
In its current form, the TAA programme primarily covers thecosts of retraining unemployed individuals. The majority of workers in TAA-sponsored training enrol in occupational training programmes – for instance, for such activities as computer operators, office clerks, medical assistants or nursing aides (Hyman
2018). During the TAA-sponsored training, programme participants are entitled to receive unemployment benefits for up to
three years, instead of the standard eligibility period of 26 weeks
that applies in most US states. To facilitate labour market adjustment across space, the TAA programme additionally pays relocation allowances to workers who obtain long-term employment
outside their current commuting area. To obtain TAA benefits,groups of three or more workers, or their representatives suchas labour unions, former employers or state career centres, haveto file a petition with the US Department of Labor. This agency

60(Re)training can also be offered by firms to their employees. However, Costa et al. (2019) find that UK firms that were adversely affected byhigher costs of intermediate inputs following the pound’s depreciation in 2016
reduced training activities for their workers.
61
More generous support for workers displaced by trade may also increase
support for free trade in the electorate. Hays et al. (2005) observe that survey
respondents in Europe and North America were less likely to advocate protectionist policies if their country provided more generous ALMPs, unemployment
benefits and social security schemes.

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The realization that globalization had adverse economic andsocial impacts on some segments of the population in highincome countries raises the question of how governments could
best support such losers from trade. We discuss below evidence
on compensation of earnings losses, programmes that facilitate
labour market adjustment, place-based policies for the revival of
economically depressed locations, and trade policies that seek tomitigate exposure to trade shocks. A common theme for all ofthese policy options is that even when they are effective in helping
trade’s losers, they tend to generate important trade-offs between
equity and efficiency.

experienced a 3.7% reduction in annual earnings, but ‘personal
income’ — which includes government transfers, business andself-employment income — only fell by around 1%. However, evenin Denmark, workers may not always be well insured against
negative income shocks due to trade. Hummels et al. (2014) reportthat a doubling of Danish firms’ offshoring reduced low-skilledworkers’ labour earnings by 1.5% in the following year, while ameasure of ‘gross earnings’ that also includes unemployment
insurance benefits and social assistance income declined only
modestly less by 1.3%.
One reason for not implementing a full compensation is thata redistribution of income via taxes and transfers from trade’s
winners to the losers can generate a sizeable loss of economic
efficiency (Antràs et al. 2017). However, a lack of adequate income
support can have grave consequences for workers whose jobs andcommunities are exposed to adverse trade shocks, such as theworkers in import-competing US localities who report that they
are unable to afford a doctor’s visit (Lang et al. 2018).

Dorn and Levell

62
Overall, 63% of all petitions are approved. A simple comparison between
all accepted and rejected petitioners is complicated by the fact that underlying economic circumstances systematically differ across the two groups, as
successful petitioners apparently were able to better document that layoffs
occurred due to large trade shocks. However, petitions are judged by individual
case investigators who vary in their approval leniency, which creates a source ofrandomness in the evaluation process where a marginal petition is more likely
to be approved when it is assessed by a more lenient investigator. Hyman’s(2018) analysis exploits this institutional feature in an instrumental variables
design that compares workers with marginal petitions whose acceptanceprobability was influenced by the discretion of the case investigator.
63
Hyman (2018) assumes that the economic deadweight loss that resultsfrom taxation could be anywhere between $0.25 and $0.75 per dollar of tax
revenue, which yields an estimated internal rate of return of 9% for the former
and 0% for the latter case.
64
Since 2007, the EGF has paid for a fraction of member countries’ ALMP
expenditures that are targeted at trade-displaced workers. Applications for EGF

i1061

instead preferred to fully rely on its own domestic programmes tosupport redundant workers (UK Parliament 2016). A recent metaanalysis of several hundred mostly European ALMP evaluation
studies shows a large dispersion in effectiveness across suchprogrammes (Card et al. 2015). About two-thirds of the analysedstudies found statistically significant positive effects of ALMPs
on employment probabilities two or three years after the endof a programme, with ALMPs supporting human capital accumulation yielding the best outcomes. Most of the programmeevaluation studies did not report programme costs, and hence
the meta-analysis does not report information on cost–benefit
calculations.65
Overall, the evidence on trade-specific and general ALMPs
suggests that such programmes can be helpful at easing displaced workers’ labour market adjustment. Different from transfer payments to the unemployed, programmes that help workers
to find new jobs mitigate not only displaced workers’ financial
losses, but also the adverse social outcomes associated withpersistent joblessness. However, not all ALMPs achieve their goals
to help workers find good jobs, and even when programmes
are effective, they do not always perform well in cost–benefit
calculations.

Reviving local economic activity
An important result of the recent literature on local labour market
effects of trade is that adverse shocks do not lead to large andrapid population adjustments. Instead, displaced workers areoften spatially immobile, and adverse labour market outcomessuch as low employment rates and depressed earnings remain
heavily concentrated in the locations whose industries were most
exposed to adverse trade shocks, even years after such shocks
subside.
An alternative or complement to supporting displaced
individuals with financial transfers or active labour market policy
programmes is to direct support at depressed regions, cities orneighbourhoods via place-based policies. Such policies can takethe form of place-based redistribution, where a system of taxes
and transfers is conditioned on individuals’ location rather thanon their individual income level. Gaubert et al. (2021) show thatplace-based redistribution can be more efficient than incomebased redistribution under some conditions, especially if thepoor population is spatially concentrated and if the place-based
redistribution does not induce strong migration from thriving todepressed locations. They also provide survey evidence whichsuggests that there is more popular support for targeting tax
credits to poor people who live in distressed places, rather thanpoor people independent of location.
Instead of transferring funds to the residents of economicallyweak regions, many place-based policies seek to stimulate job creation in such locations through such measures as infrastructure
investments or subsidies to firms. The European Union spends
about a third of its budget on cohesion policy that seeks to reduce
economic disparities across European regions. An important pillar
support are submitted by member countries, and are usually restricted to large
layoff episodes where at least 500 workers lose their job at the same firm. In
an average year between 2015 and 2020, the EGF only accepted about four suchapplications covering around 4000 trade-displaced workers per year (European
Union 2020). Close to half of the workers supported by the EGF during theseyears had lost their jobs in just five distinct events: the closures of a pairof assembly plants by Ford and Caterpillar in Belgium, two mass layoffs by
Microsoft in Finland, and another large layoff by Air France in its home market.
The EGF thus has a much smaller scope than TAA, which is likely due to its
focus on large and politically visible mass layoff events (Claeys and Sapir 2018).
65
See Crépon and van den Berg (2016) for another recent review of theliterature on ALMPs.

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then determines whether the workers were laid off by a firm thatexperienced declines in sales or production due to trade. Such
trade exposure can either be import competition or outsourcingthat affected a firm directly, or that occurred at the firm’s suppliers or customers. In the years 2015 to 2019, the Department ofLabor accepted about 830 TAA petitions per year, and nearly 90 000
workers gained access to TAA benefits annually (US Departmentof Labor 2020).
Hyman (2018) evaluates the impact of TAA receipt on workers’
adjustment to trade shocks using data on approved and rejected
TAA petitions from 24 US states during the period 1974–2016.
In the two years following the TAA petition, individuals whose
petition was approved accumulated about $10 000 less in earnings
than comparable workers whose petition was rejected, because
retraining slowed the former group’s return to the labour
market.62 However, over the following eight years, the TAA
workers earned about $60 000 more than non-TAA workers, inpart thanks to a greater probability of being employed. The
net financial gain for TAA workers of about $50 000 over ten
years is large given that the worker population under study
was earning only about $23 000 annually prior to the layoff that
prompted the petition for TAA support. If one takes these gains
for workers as the programme’s benefit, and computes its costs
based on varying assumptions for the economic distortions thatare created by the taxation required to fund the programme,
as well as moral hazard induced by extended unemployment
benefit durations, then the social return of TAA is estimated tolie in a range of 0% to 9%.63 However, another recent evaluationof TAA, which focuses on a provision of the programme thatprovides wage subsidies to workers over the age of 50 who
are willing to accept a lower-wage job, finds little evidence
for a favourable effect of such subsidies on workers’ labour
market outcomes following job displacement (Hyman et al.
2021).
Across local labour markets, TAA expenditures grow particularly rapidly in locations that face a greater growth ofChinese import competition (Autor et al. 2013a) and thatexperience greater employment declines (Kondo 2018). However,
the TAA programme is small compared with many other transfer
programmes that target the unemployed or low-income households. As a consequence, TAA accounts for less than 1% of theincrease in total government transfer spending that results froma local labour market’s exposure to import competition (Autoret al. 2013a).
Given the small scale of trade-specific programmes such as
TAA or the EU’s European Globalisation Adjustment Fund (EGF),
it is likely that many workers who are displaced by trade shocks
will be supported by general ALMPs that are available to all
unemployed workers, rather than the ones directly connected
to trade.64 Indeed, the UK never applied for any EGF funds and|i1062|Oxford Open Economics, 2024, Vol. 3, No. S1

Protective trade policy
Transfer schemes, active labour market programmes and placebased policies often provide support to workers and regions only
once trade shocks have occurred and job loss and income declines
have already taken place. Protective trade measures such as theimposition of import tariffs and quotas instead seek to reducethe magnitude of the trade shocks itself. Such policies can thus
prevent the adverse impacts of trade shocks from occurring, butthey simultaneously tend to eliminate trade’s desirable effects.
The rules of the World Trade Organization (WTO) allow its
members to impose safeguard measures such as tariffs and quotas that provide emergency protection from import competition.
Such safeguard measures must be justified by a sharp increasein imports that causes, or threatens to cause, serious injury to a

66
The name of the grant programme has changed several times. It iscurrently known as Grant for Business Investment in England, while the priorname of Regional Selective Assistance is still used in Scotland and Wales.

domestic industry.67 The measures must also be temporary, withthe goal of giving an industry some breathing space to make thenecessary adjustments to face the greater exposure to imports.
Between 1995 and 2020, the WTO registered 196 instances wherea country imposed safeguard measures, though the European
Union (four cases) and the US (eight cases) rarely used them(World Trade Organization 2020).
One prominent and controversial example of a safeguard measure is the 2002 US tariffs on steel. US steel prices were at a
20-year low in the early 2000s, and the industry suffered froman economic recession (Read 2005). An investigation by the US
government determined that imports of steel products, especiallyfrom the EU, were creating serious harm. As a consequence, theUS imposed emergency tariffs of up to 30% on various steel
products. The EU responded immediately by filing a complaint at
the WTO, which in 2003 ruled that the steel tariffs did not fulfil therequirements for justified safeguard measures. While the WTO
acknowledged that the US steel industry was negatively affectedby imports, it argued that the evidence submitted by the US did
not justify the magnitude and scope of the imposed tariffs. The
US lifted the tariffs a few months after the WTO decision andclaimed that this trade policy measure had been successful by
then. However, the evidence surveyed in Read (2005) suggests thatthe tariffs brought only modest job gains in the steel sector, while
job losses in industries that use steel as an input were larger byan order of magnitude.68
The benefit that higher tariffs bring in terms of averted job
loss in protected industries tends to trade off against lower job
creation in downstream industries, higher consumer prices, andpotential political conf lict with foreign trading partners who may
react with retaliatory tariffs. To realize greater gains from trade,developed countries instead lowered their average import tariffs
from about 12% in the mid-1980s to less than 5% in 2016 (WorldBank 2019). They also ended the Multifibre Arrangement (MFA),
which instituted import quotas to protect textile and apparelindustries against competition from low-income countries. Whilefreer trade indeed promises economic gains in the aggregate, theobservation that workers and local labour markets struggle toadjust quickly to a rapid surge in import competition suggests thatit may be advisable to reduce trade barriers gradually rather than
through a sudden shock.69
The trend towards ever-lower tariffs was broken in 2018 and2019, when the US implemented wide-ranging tariff hikes, while
affected trading partners of the US answered with retaliatory
tariffs. Given that these tariffs came in a period when the US
experienced neither a surge in import competition nor job loss in
its manufacturing sector, they could not be justified as temporary
safeguard tariffs. Instead, the US government argued that its
new tariffs on steel and aluminium products protected national
security interests, while a large set of new tariffs specificallydirected at imports from China was justified with alleged unfair
trade practices of the Chinese. From early 2018 to late 2019, the67
Different from anti-subsidy or anti-dumping measures, safeguards do
not require unfair trade practices of the exporting countries.
68
Jabbour et al. (2019) and Bown et al. (2020) show that the more widelyused anti-dumping tariffs, which are justified by other countries’ unfair pricing
practices, had no positive aggregate effects on employment in France and theUS, respectively. Such tariffs did little to shore up domestic employment inprotected industries, but were associated with job losses and lower wages indownstream customer industries.
69
The MFA, which was originally instituted in 1974, was gradually phased
out from 1995 to 2005. However, the final removal of MFA quotas in 2005
still caused a major shock to the textile and apparel sectors in high-income
countries. In the US, prices of previously quota-protected goods experienced asudden drop of 38% (Harrigan and Barrows 2009).

Downloaded from https://academic.oup.com/ooec/article/3/Supplement_1/i1042/7708084 by Theologisches Seminar der Universität Zürich user on 09 August 2024of this policy is EU Structural Funds that are directed at poorer
European regions whose per-capital income is below 75% of the
EU average. These funds are often used to finance projects related
to transportation and energy infrastructure. Becker et al. (2010)
estimate that regions just below the 75% income threshold for
eligibility experience a 1.6 percentage point greater growth of percapita GDP over periods of about five years from the 1990s to theearly 2000s, compared with regions just above the 75% threshold
which are not eligible for this funding. However, funding did notlead to differential regional employment growth. Moreover, theStructural Funds stimulated greater GDP growth only in about athird of the eligible regions, and were ineffective particularly inregions with low human capital levels and poor political governance (Becker et al. 2013b).
Governments often use place-based policies that provide
subsidies to specific firms in depressed areas. In the UK,
the Regional Selective Assistance (RSA) programme provided
discretionary grants to firms in regions with low income levels
and high unemployment.66 RSA financed up to 35% of thecosts of investment projects that involve capital expenditureon property, plant or machinery, with most funding going tofirms in the manufacturing sector. Approved projects were those
expected to either generate new employment or protect jobs thatmight be lost otherwise. Criscuolo et al. (2019) investigate theconsequences of a change in regional eligibility for RSA fundingthat was mandated by the periodic updating of the EU’s list of
economically disadvantaged regions. They find that locations
that were more likely to become eligible for RSA based on theircharacteristics in the early 1990s experienced a significantly
smaller decline in manufacturing employment and a larger
decrease in unemployment during the early 2000s. The authors
estimate that the direct costs of the RSA programme and its
indirect costs via distortionary taxation amount to only about$3500 per manufacturing job that the programme managed tocreate or preserve.
Broader reviews of spatially targeted programmes (e.g. Kline
and Moretti 2014; Neumark and Simpson 2015; Ehrlich and Overman 2020) suggest that there is substantial heterogeneity in theeffectiveness and efficiency of place-based policies, just as thereis large variation in the success of active labour market policies.
While some policies achieve their stated goals, others fail toproduce the desired increases in incomes or employment, or manage to do so only at disproportionate costs or during transitory
periods.

Dorn and Levell

8. Conclusions
International trade expanded rapidly during a wave of globalization in the 1990s and especially during the 2000s. This period
witnessed the transition of a large bloc of countries from communist to capitalist economic systems, with China emerging as theworld’s largest exporter of manufactured goods. Trade was further
facilitated by new information and communication technologies
as well as falling tariffs. While some European countries such as
Germany greatly expanded their exports during this period, othercountries such as the UK and the US were primarily faced with asignificant increase in import competition.
The rapid change in patterns of international trade had sizeable impacts on workers in high-income countries. Import competition caused many manufacturing firms to downsize or close.
In contrast to the predictions of frictionless labour market models,
many redundant workers did not rapidly move to other andsimilarly well-paid jobs. Instead, employees of import-competingi1063

firms accumulated significantly lower earnings over their careers
than comparable workers in industries with little trade exposure. Workers with low educational attainment and those in lowwage jobs experienced especially large earnings declines. The
geographic local labour markets in which the import-competing
industries cluster experienced not only larger declines in manufacturing employment, but in some cases also additional job
loss outside the manufacturing sector, along with lower wages.
Trade therefore contributed to greater inequality across workers
of different sectors, greater inequality across workers of different
skill levels and greater inequality across workers of different
geographic regions.
While rising import competition from China was associatedwith job loss in many European countries and the US, not all
labour market consequences of trade have been negative. Somehigh-income countries strongly benefited from improved opportunities for exports that created domestic jobs in export-oriented
industries. Even rising offshoring by firms has sometimes been
associated with employment and wage gains for the domestic
employees of these firms, especially among highly skilled workers
whose labour may be a complement in production to internationally sourced intermediate goods inputs. We show that levels of
manufacturing employment were quite stable in countries thatmaintained a balanced trade relationship with China, while the
manufacturing sectors of many countries that ran up a trade
deficit saw dramatic job losses.
The import competition shocks faced by industries and local
labour markets have also been connected to a range of outcomes that are less typically studied in analyses of international
trade. Recent evidence shows that these shocks caused higher
crime rates, a deterioration of health outcomes, a dissolution of
traditional family structures, and greater support for far-right
political parties. We present survey evidence which indicates thatthe general population in major European countries and the US
became more sceptical towards trade during the 2000s, whenmany of the adverse consequences of import competition shocks
materialized. However, attitudes towards international trade havebeen improving again over the last decade.
Trade can affect inequality not only through its impacts on
earnings and employment in the labour market, but also throughconsumer prices. We conduct a novel analysis of the impact ofrising imports from China on consumer prices in the UK. This
analysis shows significant benefits for UK consumers as increased
trade reduced consumer prices. However, the benefit of lower
prices is relatively evenly distributed across rich and poor households, which implies that changes in prices neither exacerbatednor mitigated trade’s impact on inequality.
The realization that trade shocks can cause severe disruption
in labour markets and rising income inequality in society raises
the question of what policymakers can do to support thelosers from globalization. Protective trade policy in the formof new import tariffs that seeks to undo past globalization
tends to create more harm than benefit. A combination ofincome support and retraining can instead help displaced
workers to avoid significant financial hardship and to findtheir way back into gainful employment. Moreover, placebased policies such as grants for firms that invest in depressedregions may rekindle economic activity in localities that suffer from persistently low employment rates following trade
shocks. It remains a challenge, however, to identify which
specific policies are effective at helping the losers from trade
while not creating unfavourable trade-offs between equity andefficiency.

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average US import tariffs levied on Chinese goods increased from
3% to 21%, while the average tariff that the Chinese applied to US
goods rose from 8% to 22% (Bown 2021).
The US tariff hikes were widely seen as part of President
Trump’s agenda to bring back jobs to America (Tankersley 2019).
Yet there is little evidence for employment gains. Flaaen and
Pierce (2020) study the impact of the US–China ‘trade war’on employment in broad US manufacturing industries, andfind that the industries that were protected by higher importtariffs did not add significantly more jobs, while downstream
customer industries faced job losses. An analysis of employment
across all economic sectors in local labour markets also finds
no evidence for substantial job gains in localities that were
specialized in tariff-protected industries (Autor et al. 2021a).
Instead, employment fell in locations whose exporting industries
were more exposed to other countries’ retaliatory tariffs. In
addition to the overall negative impact of the tariffs on US
employment, the US import tariffs also contributed to anincrease in prices faced by US firms and consumers (Amiti
et al. 2019; Fajgelbaum et al. 2020; Flaaen et al. 2020; Cavallo
et al. 2021).
While tariffs and quotas are relatively easily measurable
thanks to their quantitative nature, there exists less systematic
information and thus less research on restrictions of tradethrough regulatory policies. Countries may, for instance, restrict
imports through onerous and internationally incompatible
product safety standards. Leonardi and Meschi (2020) showthat since 1995, there has been a strong increase in ‘specifictrade concerns’ that countries filed with the WTO to denounce
regulatory barriers imposed by other WTO members. Theirevidence indicates that a rising set of US industries is protected bysuch non-tariff measures, and that these industries experienced
lower employment declines.
Overall, the evidence on the labour market impacts of protective trade policy provides a cautionary tale. Such policies can help
to mitigate trade shocks that are so sudden and large that they
overwhelm domestic industries’ and workers’ ability for economic
adjustment. However, the imposition of new trade restrictions
with the goal of protecting or bringing back jobs brings a new disruption to the labour market, and potential job gains in protectedindustries may trade off against higher prices for firms and consumers, employment declines in downstream customer industries, and adverse consequences resulting from other countries’
retaliatory trade measures.

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SUPPLEMENTARY INFORMATION
An appendix is available at Oxford Open Economics online.

This article has been prepared for the IFS Deaton Review ofInequalities. The authors would like to thank Alex Davenport forassistance in preparing much of the data used in this paper. The
paper also benefited from helpful comments provided by Richard
Blundell, Pinelopi Goldberg and other members of the Deaton
Review editorial panel, the discussants David Atkin and Dani
Rodrik, and David Autor and Gordon Hanson. Dorn acknowledges
support by the University of Zurich’s Research Priority Program‘Equality of Opportunity’.

FUNDING
This article was written for the IFS Deaton Review of Inequalities,
funded by the Nuffield Foundation (grant reference WEL/43603).
The views expressed are those of the authors and not necessarily
the Foundation.

CONFLICT OF INTEREST
Neither author has a conf lict of interest to declare.

AUTHOR CONTRIBUTIONSBoth authors were responsible for Conceptualization, Data
curation, Formal Analysis, Supervision, Writing – original draft,
Writing – review and editing.

DATA AVAILABILITY
Data or instructions to apply for data are available on request.

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