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The effect of import competition on labor income inequality through firm and worker heterogeneity in the Japanese manufacturing sector

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  • Endoh, Masahiro

Abstract

This study estimates the effects of import competition from Asia on the labor income inequality of Japanese manufacturing workers, considering firm and worker heterogeneity. Parameters are obtained from regression results of annual salary by using constructed worker–establishment panel data. The estimated salary change is positively and negatively larger for higher- and lower-paid workers, respectively, implying that labor income inequality among industry–size–skill–gender groups has increased due to imports from Asia. However, the actual evolution of income inequality during 1998–2014 is not successfully explained by Asian imports: other shocks overshadow import competition to determine actual income inequality.

Suggested Citation

  • Endoh, Masahiro, 2021. "The effect of import competition on labor income inequality through firm and worker heterogeneity in the Japanese manufacturing sector," Japan and the World Economy, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:japwor:v:59:y:2021:i:c:s0922142521000232
    DOI: 10.1016/j.japwor.2021.101076
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    More about this item

    Keywords

    Firm size; Gender; Heterogeneity; Import competition; Inequality; Labor income; Skill;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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