Trade economics
Amid mounting alarms over a looming 'second China shock', I investigate the impact of Chinese imports on employment in the EU so far. Reviewing the evidence, I focus on the one methodology which predicts the worst, but is also the most challenged by recent contributions from econometricians: shift-share instrumentation. Applying these contributions to French trade and industrial data, I estimate that a marginal rise in Chinese import exposure is associated with a −4.02 pp decadal decline in total manufacturing employment. That effect is exclusive to final goods, robust across instrumentations and spatial econometrics' tests. We are thus able to explain at least 25% of the manufacturing employment decline over 1990-2018. The elasticity of nonmanufacturing employment to the shock is estimated at 1.37, just below U.S. equivalent results. I also substantiate concerns about the increase in the technology-content of Chinese exports, pondering potential policy responses from the EU.
I venture a Chetverikov-Larsen-Palmer identification framework to evaluate the distributional impact of trade competition in Europe. While I do not identify a significant effect for exchanges between EU countries, I find a strongly polarized response to imports from emerging markets. Even with reasonable estimates of gains from trade via other channels, import shocks from the South leave nearly every household better off but for the bottom 30%, who experience a marked decline in pre-tax income. I explore how this sharp non-linearity of the response interacts with social security schemes. Post-redistribution, the impact is flat across the income distribution, yet Samuelson's seminal insight holds if applied to the increased dependency on public benefits.
WP / Files
I investigate how trade between the EU and its emerging partners, and its impacts, may increase competition for public resources, particularly at a time when social security systems are facing strains. While in many European countries, competition from southern partners appears to strengthen populist or redistribution-friendly coalitions, in the French context, I identify a notable shift towards conservative parties, both centrist and radical, regardless of their stance on trade. I review the effects on voter turnout, union membership, attitudes towards EU integration, and non-party activism to interpret this outcome, putting the emphasis on conflicts over redistribution.
Labor economics
It is often argued that Schelling-type tipping point models are fitted for U.S. dynamics, and that tipping reactions in Europe are markedly more difficult to identify. Here, I apply the Schelling setting to a large selection of Census data and newly published series, finding reactions which are not markedly different from the U.S. figures of [Card, Mas, and Rothstein 2008]. I ponder the interpretation of this result.