Impacts of increased Chinese imports on Japan’s labor market

Abstract

Using Japanese firm/establishment level census data, we investigate the impact of Chinese import penetration on employment in Japan. We found negative impacts of Chinese import penetration on total employment, especially for industries that produce competing products to Chinese imports, and a positive impact of import penetration in the industries from which firms purchase their inputs (upstream import penetration). The negative impacts are mainly driven by firms' exit from the market while positive impacts are enjoyed by surviving firms. We did not find any significant impacts of the penetration in industries to which firms sell their products (downstream penetration).

China's impact on regional employment: Propagation through input–output linkages and co‐location patterns

“…This paper, therefore, presents evidence that while import competition reduces local employment, there is also an offsetting benefit to Japanese local labour markets from the improved availability of low‐cost intermediate inputs. The net effect on local CZ‐level employment from these two opposite effects is likely to be a net negative, which is in agreement with the establishment‐ and product‐level analyses by Hayakawa et al (2021), indicating that the direct and indirect propagated effects work even at the local labour‐market level. Moreover, our results complement those in the literature that find that intermediate imports from China may be favourable to the importing manufacturers (Kiyota et al, 2021; Taniguchi, 2019) by explicitly showing the positive downstream supply chain shock propagation.…”

“…Since the estimated coefficients of the direct penetration are larger when accounting for the upstream and downstream measures compared to the simplest case, this means that ignoring this input-output linkage would underestimate the direct impact of import penetration. This is consistent with previous research finding a positive effect of inputs imported from China at the industry, firm and product levels Antràs et al, 2017, Fabinger et al, 2017, Hayakawa et al, 2021 and the finding by Taniguchi (2019) that intermediate imports may benefit Japanese manufacturers.…”

“…This paper is particularly related to the research on Japan within this literature. Our results are consistent with industry‐, firm‐ and product‐level analyses that report the positive effects on employment and firm performance more generally in the downstream industries (Fabinger et al, 2017; Hayakawa et al, 2021). Similar to this paper, Taniguchi's (2019) prefectural‐level study shows that between 1995 and 2007, imports from China had a positive impact on local employment in Japan, primarily because of intermediate goods imports.…”

İşgücü Talebi̇ Uluslararasi Ti̇carete Tepki̇ Veri̇yor Mu? Türk İmalat Sektöründen Kanitlar

“…In this context, a growing body of research also examines the employment effects of increased exposure to imports from China for various countries. Most of these studies focus on developed countries; some examples are Autor, Dorn & Hanson (2013), Balsvik, Jensen & Salvanes (2015), Acemoğlu et al (2016), andHayakawa, Ito &Urata (2021). Nevertheless, still, there is not a sufficient number of studies, especially for developing countries.…”

Effect of Increasing Import Competition from China on the Local Labor Market: Evidence from Sweden

“…The rapid growth of trade between low-and high-income economies raises concerns about its impact on domestic labor markets in high-income countries [1][2][3][4][5][6][7][8][9][10][11][12][13][14]. The increase in China's trade with other countries has dramatically changed world trade patterns over the past few decades, leading policymakers to rethink domestic labor market adjustments and their implications.…”