Labor Market Adjustments after a Large Import Shock: Evidence from the German Clothing Industry and the Multi-Fibre Arrangement

31 Pages Posted: 15 Dec 2009

See all articles by Nils Braakmann

Nils Braakmann

affiliation not provided to SSRN

Joachim Wagner

University of Lueneburg - Institute of Economics; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics; IZA Institute of Labor Economics

Abstract

This paper considers labor market adjustments following a large import shock in the German clothing industry caused by the phasing out of the Multi-Fibre Arrangement. Using the German shoe industry as a control group and administrative data, we study adjustments on the individual and firm level using difference-in-differences. Our results suggest relatively small increases in unemployment risk and no wage effects on the individual level, despite a 30% increase in plant mortality. Part of the different effects found for plants and individuals can be attributed to the reallocation of workers into other industries and occupations.

Keywords: import shock, adjustment, clothing industry, Germany

JEL Classification: F13, F14, F16

Suggested Citation

Braakmann, Nils and Wagner, Joachim, Labor Market Adjustments after a Large Import Shock: Evidence from the German Clothing Industry and the Multi-Fibre Arrangement. IZA Discussion Paper No. 4633, Available at SSRN: https://ssrn.com/abstract=1522701

Nils Braakmann (Contact Author)

affiliation not provided to SSRN ( email )

Joachim Wagner

University of Lueneburg - Institute of Economics ( email )

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