**Table 1: Exports, imports and local jobs**

|||**OLS**|||**IV**||
|---|---|---|---|---|---|---|
|(a) **Impact of exports on labor forceparticipation**|(1)|(2)|(3)|(4)|(5)|(6)|
|log (Exports per worker), change|0.423***|0.553***|<br>0.550**|*<br>2.821**|<br>1.639*|<br>1.664*|
||(0.148)|(0.134)|(0.134)|<br>(1.129)|<br>(0.958)|<br>(1.000)|
|Observations|1,980|1,980|1,980|1,980|1,980|1,980|
|Demographic and employment controls (year 2000)|NO|YES|YES|NO|YES|YES|
|Median income control(year 2000)|NO|NO|YES|NO|NO|YES|
|(b) **Impact of exports on employment**|(1)|(2)|(3)|(4)|(5)|(6)|
|log (Exports per worker), change|0.457***|0.587***|<br>0.589**|*<br>2.561**|<br>1.354|1.405|
||(0.151)|(0.139)|(0.140)|<br>(1.126)|<br>(0.968)|<br>(1.010)|
|Observations|1,980|1,980|1,980|1,980|1,980|1,980|
|Demographic and employment controls (year 2000)|NO|YES|YES|NO|YES|YES|
|Median income control(year 2000)|NO|NO|YES|NO|NO|YES|
|**(c)** **Impact of imports on labor force participation**|(1)|(2)|(3)|(4)|(5)|(6)|
|log (Imports per worker), change|0.127|0.0772|0.0783|1.238***|-0.217|-0.220|
||(0.0846)|(0.0762)|(0.0762)|(0.369)|(0.231)|(0.230)|
|Observations|1,980|1,980|1,980|1,980|1,980|1,980|
|Demographic and employment controls (year 2000)|NO|YES|YES|NO|YES|YES|
|Median income control(year 2000)|NO|NO|YES|NO|NO|YES|
|**(d)** **Impact of imports on employment**|(1)|(2)|(3)|(4)|(5)|(6)|
|log (Imports per worker), change|0.130|0.0816|0.0818|1.296***|-0.144|-0.145|
||(0.0866)|(0.0794)|(0.0794)|(0.378)|(0.244)|(0.243)|
|Observations|1,980|1,980|1,980|1,980|1,980|1,980|
|Demographic and employment controls (year 2000)|NO|YES|YES|NO|YES|YES|
|Median income control(year 2000)|NO|NO|YES|NO|NO|YES|

_Note:_ Robust standard errors in parentheses. *** p < .01 ** p < .05 * p < .1. The dependent variable is the change from 2000 to 2015 in the labor force participation rate and employment rate. The explanatory variable is the change in the log of exports-toand imports-to-workers workers from 2004 to 2014. Demographic and employment controls include the proportion of rural population, the proportion of population aged 15 and more who are literate, total population, and the share of employment in the primary, secondary and tertiary sectors of economic activity (all variables in the year 2000).

# 3.2 Exports, imports and the labor income channel

Table 2 shows the impacts of exports and imports per worker on labor incomes. The weak impacts of exports on the employment rate in Table 1 may be due to the fact that higher exports per worker led to a net inflow of migrants, thereby increasing both the numerator and the denominator of the employment rate (see section 2.2). We therefore assess the impact on total labor incomes, i.e., the sum of all labor incomes in a municipality. The effect of exports on the total labor income at the local level is statistically significant. A 10 percent increase in exports per worker raised total labor incomes by 2.4 percent on average (panel a, column 6). Considering that total labor incomes in real terms grew by 9.2 percent during the period, this finding is economically significant (see also Rodríguez-Castelán et al. 2020).

Focusing on imports per worker, results confirm the positive effect on total labor incomes, although the impact is economically weaker. This could be due to offsetting effects of imports, as the latter could be import-competing (e.g., in the case of final consumer goods) or complementing domestic production. While the former reduces output and labor demand, the latter is linked to enabling and increasing output and employment. However, the average labor income per worker did not grow in response to export and import growth (panels b and d). As was the case for labor force participation and employment rates, imports showed a weaker effect on local labor incomes than exports, both statistically and economically.

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