The impact of the Chinese import shock on Finnish regional labor markets

Abstract

The rapid rise of Chinese exports over the past few decades has raised concerns about manufacturing jobs and internal labor market outcomes in high-income countries. I analyze the effect of rising Chinese import competition on Finnish regional manufacturing employment between 1995 and 2007. The analysis exploits the cross-regional variation in initial industry structures and uses Chinese imports to other high-income countries as an instrument for Chinese imports to Finland. I find that rising Chinese import competition has a negative effect on the share of manufacturing employment in Finnish sub-regions.