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Trade Competition and Migration: Evidence from the Quartz Crisis

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  • Twinam, Tate

    (College of William & Mary)

Abstract

Foreign competition and technological change can both present threats to domestic industries, potentially resulting in out-migration from cities and regions where these industries are spatially agglomerated. In this paper, I study the migration effects of one such trade shock: The quartz crisis, which devastated the globally dominant Swiss watch industry in the 1970s. Using a differences-in-differences strategy, I show that this trade shock led to a rapid loss of population in affected areas, and a long-run change in growth patterns. This contrasts with many other studies of large trade shocks, which find little migration response. I highlight three key factors that distinguish this shock from others and may explain the divergence: 1.) the crisis negatively impacted a key export industry while generating no offsetting gains, 2.) the affected labor markets were highly non-diversified, and 3.) the affected workers were highly mobile.

Suggested Citation

  • Twinam, Tate, 2020. "Trade Competition and Migration: Evidence from the Quartz Crisis," SocArXiv twscm_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:twscm_v1
    DOI: 10.31219/osf.io/twscm_v1
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