The Impact of Import Competition on Employment and Wages in Swiss Manufacturing

This paper explores the impact of import competition on wage and employment at the industry level in Switzerland. We estimated reduced-form wage and employment equations for a panel of seven Swiss manufacturing sectors. Our analysis relies on a basic partial equilibrium relationship that relates changes in import price to domestic factor price and factor demand changes. Results are consistent with those found for other countries. A majority of the coefficients are significantly positive, reflecting a negative impact of import competition on both employment and wages, but our main result is that all the elasticities have a relatively small magnitude. As in several other studies, our results suggest that import price variations have had very little incidence on domestic labour market.